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Are You on the 401K Plan Escalator?

by Fern LaRocca CFP®

in 401K,401k Contribution Limits,401k Contribution Limits,401k limits,401K Maximum

Most employers now enroll you automatically in the company’s 401K plan. Now employers may include a default escalator feature that will automatically periodically increase your 401K contribution without your affirmative election according to the “Savings Initiative” guidance (IRS Revenue Ruling 2009-30).

Some plans will allow you to contribute your unused paid time off (PTO), too.

This is a good thing, folks. Every time you get a wage increase your 401K plan contributions will increase automatically. Yay! More money working for you means a bigger balance.

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