If you contribute less than 4%, then they will contribute 1/4 of what you contribute.
So if you contribute 20% of your $70,000 salary, then your contribution is $14,000 and theirs is $700.
Be aware that even though your account is a Roth, employer contributions are pre-tax and are treated as a traditional 401k.
Well, I do agree with Amy. I think it says if you contribute 4% of your income they contribute 1% of your income as well. So your 4% gets you 5%.
Paragraph 2 says you are more than welcome to contribute more than 4% of your income BUT they will not contribute any more than the 1%.
Not a very good match.
Hi, I do not understand the amount my employer will contribute to my roth 401k. I am reading a passage from my employers handbook and this is what they say about employer matching:
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The Company will make a Matching Contribution equal to 25% of your Elective
Deferrals. The Company will not match Elective Deferrals that exceed 4% of your
eligible earnings. For example, if you contribute 4% of your eligible earnings to the Plan
as an Elective Deferral, the Company will contribute 25% of your Elective Deferral or
1% of your eligible earnings.
Assume instead that you contribute 5% of your eligible earnings to the Plan as an
Elective Deferral. In this case, the Company will make a Matching Contribution equal to
25% of your Elective Deferral but will not match the portion of your Elective Deferral
that exceeds 4% of your eligible earnings, and your total Matching Contribution will still
be 1% of your eligible earnings.
You must make Elective Deferrals in order to receive the Matching Contribution. The
Matching Contribution is made each pay period that your Elective Deferrals are made
and is calculated based on your eligible earnings for that pay period. Once your Elective
Deferrals stop, the Matching Contribution also stops.
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Salary: 70,000 yearly
Contribution: 20%
Type: Roth 401k
From the passage above can you determine how much my employer will contribute yearly.
