This Hidden 401(k) Rule Could Cost You Thousands a Year - E57

Michael and Brady uncover a costly retirement savings mistake that can quietly drain thousands of dollars from even the most financially disciplined professionals. Maxing out a 401(k) early might feel like a smart move, but what if accelerating your savings means leaving money from your employer behind? Through real-world examples involving physicians, attorneys, and other high-income earners, they reveal how employer matching rules can turn an aggressive savings strategy into an expensive oversight. They explain how a little-known provision called a true-up can make the difference between receiving your full employer match and missing out on thousands of dollars in potential retirement contributions. The conversation also explores how to structure contributions, balance competing savings priorities, and avoid sacrificing long-term wealth for the sake of hitting retirement limits early. This episode offers a practical framework for identifying hidden financial inefficiencies, protecting valuable employer benefits, and making every retirement dollar work harder. Key Timestamps: (00:00) – The 401(k) Mistake (02:00) – Why High Earners Lose Money (04:00) – Employer Matching Explained (06:00) – The Cost of Maxing Out Early (12:00) – The True-Up Provision (14:00) – The Six-Figure Cost of Missed Employer Matches (17:00) – Timing Your Contributions (19:00) – Balancing Savings and Cash Flow (21:00) – Reviewing Your 401(k) Strategy (25:00) – Stop Leaving Money Behind Key Takeaways: • Maxing out your 401(k) early can cause you to miss employer matching contributions if your plan requires contributions throughout the year. • A true-up provision can help make up for missed employer matches at the end of the year, but not every retirement plan offers one. • High-income professionals who receive bonuses or contribute a large percentage of their salary are particularly vulnerable to this oversight. • Missing $7,500 in annual employer contributions could create a six-figure difference in projected retirement wealth over ten years when investment growth is considered. • Reviewing plan documents, checking pay stubs, and consulting HR or a financial advisor can uncover missed benefits and improve retirement planning. Key Topics Discussed: Financial Fortitude, Michael Acosta, Brady Hemmerle, Genesis Wealth Planning, 401(k) Contributions, 401(k) Employer Matching, Employer Retirement Benefits, True-Up Provision, Retirement Planning, High-Income Professionals, Physician Financial Planning, Attorney Financial Planning, Dentist Financial Planning, Executive Compensation, Retirement Savings Strategies, Maximizing Employer Match, 401(k) Contribution Limits, 403(b) Plans, 457 Plans, Retirement Account Optimization, Wealth Building Strategies, Compound Growth, Retirement Investment Growth, Financial Independence, Cash Flow Management, Tax-Advantaged Retirement Accounts, Bonus Compensation Planning, Retirement Plan Administration, Employee Benefits Optimization, Financial Planning for Physicians, Financial Planning for Attorneys, Long-Term Wealth Accumulation, Retirement Contribution Strategies, Financial Efficiency, Investment Planning, Employer-Sponsored Retirement Plans Mentions: Website: https://www.genesiswealthplanning.com/ Michael’s LinkedIn: https://www.linkedin.com/in/michaelracosta/ Brady’s LinkedIn: https://www.linkedin.com/in/brady-hemmerle-cfp%C2%AE-75043013a/ Financial Health Checkup: https://www.livingbalancesheet.com/lbsVision/lite/michaelraco This podcast is for informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. Guest speakers and their firms are not affiliated with or endorsed by PAS, Guardian, or Genesis Wealth Planning and opinions stated are their own. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. All investments and investment strategies contain risk and may lose value. Michael Acosta is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 6115 PARK SOUTH DRIVE, SUITE 200, CHARLOTTE NC, 28210, 704-5528507. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Genesis Wealth Planning is not an affiliate or subsidiary of PAS or Guardian. CA Insurance License # 0M50974. 7237198.47. Expiration 10/28.