I Could Get Fired for this 401k Front Loading Video

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How’s it going everybody this is beat the bush today i’m gonna talk about a concept called 401k front-end loading if this is applied properly you may seek to gain somewhere between zero and seven thousand dollars or so every few years i made this particular video some time ago for my patreon members and now i’ve decided to release it to the general public mainly

Because i don’t have a particular job that is paying into my 401k i am self-employed now so i can just blab all i want to the internet that there are these little i would say slightly gray area tactics where you can actually gain more money from your employer and this is outside of your salary outside of your 401k matching so this is actually more money on top of

What you would normally get if you applied this properly now i was actually scared of making this video while i was still employed because you know my administrator boss or something they might see it and they might go tell their 401k administrator i might get fired over something like this because you know i’m under a 401k plan and i’m essentially telling people

Tactics on how to sort of game the system a little bit certainly i think if you ever talk to your 401k administrator they’re not gonna tell you these things and through my own research sometimes when people talk about 401k front-end loading they’re talking about a slightly different topic where they’re saying hey you know you can invest kind of early on during

The year will that make a difference this is not exactly what i’m talking about because when all is said and done you’re actually may have a chance of gaining more money then you are typically thinking that you’re gonna get from your regular matching the concept is simple okay when you go to a job usually they have plans where they go okay they have one-to-one

Matching okay you can get up to three percent of your salary one-to-one match some of them might do six percent some of them might do one to to match whatever it is the idea here is to max out your 401k so that you get your match early on in the year some companies will only allow you to match up to 3% of your monthly income not 3% of your yearly salary on the

Very first paycheck so this is actually a very fine point and you might have to dig into your 401k literature to find out if they actually do this worst case scenario you can actually go ok instead of only contributing to your 401k 3% you might do 10% and see if they actually do one-to-one matching they put another 10% for you for that current month this is a way

To test it out now let’s extend this a little bit further rather than 3 percent rather than 10 percent have you gone as crazy as 100 percent of your paycheck going into your 401k let’s say it’s january 1st and you go ok 100 percent so your whole paycheck untaxed all of it goes in your 401k what happens then if they would do your matching for your whole entire year

Salary at the very first month that might mean that you can actually take home that portion of the matching early on so these days for 2019 the 401k maximum limit is $19,000 for some really high income earners engineers or whatever you might be able to max out this $19,000 within a few paychecks so january you might have to pay check and then maybe february 1 or

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2 paycheck so i don’t know two to four paychecks you might already max out this $19,000 already let me also say before you get too excited i know some companies that do not do the full 3 percent of your jewellery salary as much as you want to early on in the year sometimes they limit it so that they only do 3 percent of your current paycheck that’s the maximum

So let’s just say for really round numbers you make $120,000 a year so this comes out to be $10,000 a month i know a lot of people don’t make this much but it makes the numbers easier to calculate 3 percent of this $10,000 is essentially $300 so under a company plan that only matches up to 3 percent of your current paycheck then if you let’s say the first month

You contribute $10,000 the most arrogant put in matching for you into your 401k is $300 the next month you still need to max out your 401k because so far you only put $10,000 in you put another nine thousand dollars into reach to 401k maximum limit and then your company puts in another three percent matching so it’s another three hundred dollars the months after

They’re gonna go well you’re not contributing anything to your 401k so therefore they’re not gonna match anything therefore you’re not going to get the three percent matching so for the rest of the year it’s gonna be zero so for a companies that actually do this this might not be a very good idea because you’re not taking advantage of all of the matching for more

Than a few companies that i have worked for they do not have this fine print locked down this means that you can contribute as much as you want to earlier on in the year and they would match this up to your yearly salary not the percent of that monthly payment so let’s go through this again for a company that would actually match up to your you larry salary every

Single month you contribute $10,000 this is 100 percent of your paycheck let’s say they pay bimonthly you put in $10,000 now your yearly salary is $120,000 three percent of this is $3,600 so what’s gonna happen for a company that allows this is that you put in $10,000 the 401k gets matched to up to three percent of your salary so they put in another three thousand

Six hundred dollars so at the end of the first month you already locked down your three percent matching you already have it it’s in your pocket it’s in your 401k already now the next month you continue to max out your 401k so you put in another nine thousand dollars up to the irs limit but then you’re not gonna get any more matching because you max it out already

Another example is if your company has six percent matching so if you make a hundred twenty thousand dollars a year six percent is seven thousand two hundred dollars so during the first month you put in ten thousand dollars they’re gonna match the seven thousand two hundred dollars already so right away in your 401k at the end of january you’re gonna see ten thousand

Dollars and another seven thousand two hundred dollars just plop right in because they’re doing that matching again the next month you put in nine thousand dollars up to the irs limit but they’re not gonna match any more because you already maxed out that limit well so after looking at the you might go well so what does it matter because every single year you’re still

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Gonna get the same amount of matching the magic happens is if you do this every single year there is going to be some chance that you’re gonna be switching jobs there is some chance that you might get laid off you might get fired you might decide to quit your job and retire or something so therefore if it happens right after your 3% match 6% match happens then you

Essentially took home that entire matching for the entire year during that first month already therefore if you’re no longer with the company after you reaped all the matching benefits you still get it for the entire year so it’s kind of like still working for the company and reaping the 3 percent matching benefits now when does it not matter is if you happen to

Get fired get laid off quit or something at right around december timeframe because you could have just spread out the matching all throughout the year so there is some chance that that might happen because you really don’t have much control over when they lay you off when you get fired but you do have a chance of when you want to quit you can statistically though

You can look at this in a probability standpoint if you always front-end load your 401k you can wait for a certain instance of this happening and let’s say on average it’s gonna happen somewhere right in the middle of the year you’re gonna stand to win in this you know on average the mean is about $1,800 and if they match 6% the mean is about $3,600 so if you do

This all your life you’re probably going to make a few thousand dollars out of this now you also have to think about you need to be in such a good financial situation that you can forego a few paychecks you need to have enough money in the bank that you don’t absolutely need to get paid every single month you’re not living paycheck to paycheck so you can go on i

Don’t care about that paycheck i’m gonna put a hundred percent into my 401 k of that whole paycheck and then later on you can change it you know change it to something lower so after you do that $19,000 already and while this is happening you front-end load your 401k now i feel like i need to keep on talking about this to kind of give you all the finer points and

Details if you work for a company and you do this front-end load thing and then all of a sudden let’s say you know middle of the year you switch to a new company and that new company also has a 401k well this means that at the new company you’re not gonna be able to get their matching because you already contributed $19,000 to your 401k what you could do is when

You’re at your new company still do the matching you should also try to front-end load it there because if you’re in june and you can still reap the whole years worth of matching there then you can put that money in your 401k and try to not reach that $19,000 limit because you already reach that $19,000 let me at your first job so during your second job if you are

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Contributing more to it that means you eventually are gonna have to take some back out so that at the end of the year for whatever calendar year it adds up to be $19,000 total so in a sense if you switch jobs and for any two companies that does your full year’s matching this means you can reap the benefits of both companies now this doesn’t need to absolutely be

Right in the middle of june you could switch job right at december and then you can like put in your whole paycheck and try to get all the matching from that company even though you only work for like one single paycheck just two weeks of the end of the year and then you can try to reap all the benefits of the matching of the whole year now let me talk about the

Vesting period of these companies many companies is not going to let you run away with their matching if you work there just for one year some do some don’t but a lot of them they vest within a three to four year time period so you’re gonna end up having to work for a company and you know you have that money sitting there and then you gotta work for it for a certain

Amount of time usually it’s a tiered kind of vesting period the first year you get 25% of the matching the second year you get 50% a third year you get 75% you get so you get more and more as you reach the full vesting period so let me just say even if you have this vesting period going on it’s still good to do this because you never know when you’re gonna quit

You can try to stay as long as you can but you know this is sort of hard to control but as long as you keep on doing this you’re gonna eventually benefit now sometimes reading all the fine print in your 401k it’s a little difficult i’ve tried myself you have to dig really deep in there so an easier way would be to instead of putting three percent matching into

Your 401k you could do something like 10% or 20% just you know throw a probe out there just change it and then go okay how much are you gonna match just because i put in 10% and then you can test it out that way and then once you know that if it’s possible then you can go fall out and go a hundred percent so i guarantee you if you do this all the time you’re gonna

Eventually benefit you’re gonna eventually get a few thousand dollars out of this because of this well i really do hope that if you take advantage of it and you actually get some real money thousands of dollars come back this for this video let me know that you benefit did i mention that i have a channel t-shirt that has a honey badger on it says infinite vacation

And well if you use this 401k front-end loading method it’s gonna help you with your infinite vacation check out my link for this t-shirt down in the video description below push that like button push that subscribe button and ring that bell icon thanks for watching

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I Could Get Fired for this 401k Front Loading Video By BeatTheBush

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