Excess contribution or not?

[erikaeriga]

So I switch jobs during the year 2024. Let's say this is a break down of my contribution by end of year 2024:

Company 1:

Pre-tax 401k: 3,000

Company match: 1,000

After-tax: 40,000

Company 2:

Pre-tax 401k: 20,000

Company match: 10,000

After-tax: 0

The limit for 2024 is: $23,000 for Pretax and roth employee contributions, and 69,000 for Employee and employer contributions.

My total pre-tax and roth contribution is not over the 23,000 limit, but my total contribution is over the 69,000 limit. My question:

1. I heard that the 69,000 limit is for each employer, rather than each person, is that correct?

2. If 'yes' to the first question, does that mean I can actually increase my after-tax contribution for company 2, as long as it's not over 39,000 (69,000 - 20,000 - 10,000), I won't have excess contribution penalty for 2024?

3. If 'no' to the first question, and I choose to get excess return from company 1, can I only get $5,000 return from the after-tax account, but nothing from the pre-tax at all (since I'm not over-contribute the pre-tax account)?

I appreciate any insights, thank you!

[tagteam]

I'm going to page @dmertz who can almost certainly provide insight and an answer.

[dmertz · Accepted solution]

1.  Correct.

2.  Provided that the plan at company 2 allows after-tax contributions, you can make after-tax contributions, with total contributions subject to the overall contribution limit of $69,000 or compensation at company 2, whichever is less.