pillman78

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Feb 4, 2017
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I know that new pharmacists can contribute to a 401(k) three months after they start, and they are fully vested from the beginning. However, CVS doesn't begin to match until after the first year. My question is do they match your contributions for that first year or do they only start matching from that point (year 1) forward?
 

Apotheker2015

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Jun 9, 2015
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I know that new pharmacists can contribute to a 401(k) three months after they start, and they are fully vested from the beginning. However, CVS doesn't begin to match until after the first year. My question is do they match your contributions for that first year or do they only start matching from that point (year 1) forward?
It's not retroactive if that's what you're asking. At most companies, your % match on eligible pay starts on day on day 366 of employment and must have at least 1000 hours to show for that year. As soon as you're able to get your match, contribute as much as you can in order to reach $18K earlier in the year. That way you get your match and you let that compound interest do its magic the rest of the year.
 
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IndyPrePharm

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Feb 7, 2010
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It's not retroactive if that's what you're asking. At most companies, your % match on eligible pay starts on day on day 366 of employment and must have at least 1000 hours to show for that year. As soon as you're able to get your match, contribute as much as you can in order to reach $18K earlier in the year. That way you get your match and you let that compound interest do its magic the rest of the year.
Like Apotheker2015 said, it's not retroactive matching.

However, I've never heard of a 401k match that continued after your contributions have stopped (because you maxed out early in the year..once you stop putting in, they usually stop putting in too, even if you murdered it in the first quarter of the year). I contribute $692.30 per paycheck to arrive at the $18k IRS maxout each year but to also ensure that I get an employer match with every single paycheck.

Apotheker, have you ever checked your 401k account AFTER you have maxed out in a given year, and seen whether CVS still continues to put a match in there for you? I'd be interested...and jealous to see that because that's not what my employer does if I maxout early in the year.
 
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Apotheker2015

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Jun 9, 2015
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Like Apotheker2015 said, it's not retroactive matching.

However, I've never heard of a 401k match that continued after your contributions have stopped (because you maxed out early in the year..once you stop putting in, they usually stop putting in too, even if you murdered it in the first quarter of the year). I contribute $692.30 per paycheck to arrive at the $18k IRS maxout each year but to also ensure that I get an employer match with every single paycheck.

Apotheker, have you ever checked your 401k account AFTER you have maxed out in a given year, and seen whether CVS still continues to put a match in there for you? I'd be interested...and jealous to see that because that's not what my employer does if I maxout early in the year.
I'd say you should call HR and talk to one of the representatives. I do see what you are saying. You hit 18K early. Say you get 100% match ($1 for $1) up to 5% of your eligible. Then you end up working a lot of extra hours and your eligible pay increases. I would think or expect that the company would throw in the extra bucks to bring your match up to the new %5 of eligible pay.
Ok, so you make 125,000; 5% = 6,250
extra hours 15,000;
new total pay 140,000; 5% = 7,000
Difference $750
I would think you would get a catch up match at the end of the year(?) unless the fine print states otherwise, which makes you miss out on compounding interest.
It's worth asking and walk them through a simple numeric example. I can see a representative getting lost there or giving you whatever answer to get you off the phone. The fine print should be on the paperwork you signed. As you know, I haven't been around that long. So hopefully, one of our more senior and wiser pharmacists can shed more light on that.
 
Oct 19, 2013
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Not a pharmacist, but I administer 401k plans. You do not want to front load all of your contributions unless they calculate match annually, which is pretty rare....most calculate per pay period. If they match at 5%, you want to be putting that 5% in each pay period and just front load the excess.
 

wucool33

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Jun 22, 2006
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CVS clearly states that they will do catch-up matching at the end of the year if you maxed out early... go read a book (or the manual)
 

Whereismynorco

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Nov 7, 2014
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So I guess they are changing this contribution starting next year, They will match per pay check and doesn't say anything about catch up contribution
 

Momus

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Apr 2, 2008
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Like Apotheker2015 said, it's not retroactive matching.

However, I've never heard of a 401k match that continued after your contributions have stopped (because you maxed out early in the year..once you stop putting in, they usually stop putting in too, even if you murdered it in the first quarter of the year). I contribute $692.30 per paycheck to arrive at the $18k IRS maxout each year but to also ensure that I get an employer match with every single paycheck.

Apotheker, have you ever checked your 401k account AFTER you have maxed out in a given year, and seen whether CVS still continues to put a match in there for you? I'd be interested...and jealous to see that because that's not what my employer does if I maxout early in the year.
CVS has true up match. If you front load $18k in 2 months, you will get the remaining match owed to you at yr end. About 50% companies have true up feature on their 401k. You have to know what your 401k plan is.

Now the question becomes... frontloading means you don't get the match until later but your contribution is invested all 18k in the beginning of the year. Which one will give you a better total absolute return, dca contribution + dca match vs. front load contribution + year end match?

If you plan to leave the company, it's better to max out early immediately especially if they have true up feature, then quit. Your next company might make you wait 1 yr before you can contribute. I also feel this is why some people quit in the beginning of the yr. So, they can contribute 401k at the beginning of the next yr @ new company.
 
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mentos

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Nov 22, 2009
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CVS has true up match. If you front load $18k in 2 months, you will get the remaining match owed to you at yr end. About 50% companies have true up feature on their 401k. You have to know what your 401k plan is.

Now the question becomes... frontloading means you don't get the match until later but your contribution is invested all 18k in the beginning of the year. Which one will give you a better total absolute return, dca contribution + dca match vs. front load contribution + year end match?

If you plan to leave the company, it's better to max out early immediately especially if they have true up feature, then quit. Your next company might make you wait 1 yr before you can contribute. I also feel this is why some people quit in the beginning of the yr. So, they can contribute 401k at the beginning of the next yr @ new company.
Does that apply for next year? Got a flyer in the mail that the match will be per paycheck now.
 
Nov 12, 2017
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Not a pharmacist, but I administer 401k plans. You do not want to front load all of your contributions unless they calculate match annually, which is pretty rare....most calculate per pay period. If they match at 5%, you want to be putting that 5% in each pay period and just front load the excess.
Yes, monitor your max closely and spread out your contributions. I change my contribution rate a few times a year if I pick up extra shifts or bonus check.
 

Dr Wario

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No true up contribution for year 2018 guys. Make sure to change the contribution percentage
Wow they are really trying to nickle and dime people. They are also phasing out flat dollar amount contributions and will only allow percentage of pay, this will make it a real pita to hit the max IRS contribution and company match.
 
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Nov 30, 2017
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It's not retroactive if that's what you're asking. At most companies, your % match on eligible pay starts on day on day 366 of employment and must have at least 1000 hours to show for that year. As soon as you're able to get your match, contribute as much as you can in order to reach $18K earlier in the year. That way you get your match and you let that compound interest do its magic the rest of the year.
Terrible advice. They only match a percent of your paycheck, not a percent of your yearly salary. You'll front-load your 401k quicker, but you'll miss out on free match dollars.
 

Dr Wario

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Feb 12, 2011
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Terrible advice. They only match a percent of your paycheck, not a percent of your yearly salary. You'll front-load your 401k quicker, but you'll miss out on free match dollars.
It depends on the company, CVS up through 2017 did a true up contribution so that it was ok if you did front loaded the 401k, but starting in 2018 the match will only apply to your current paycheck.
 

mentos

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Wow they are really trying to nickle and dime people. They are also phasing out flat dollar amount contributions and will only allow percentage of pay, this will make it a real pita to hit the max IRS contribution and company match.
Am I doing this right? Say you make 120k. The max company match is $6000/year ($230.77/paycheck).

16% contribution = $19,200/year ($738.46/paycheck), your last paycheck contribution will get cutoff at $18,500 and you don't get the full 5% company match for the year. You'll only get $39.5 match for your last paycheck.

15% contribution = $18,000/year ($692.31/paycheck), you get the maximum 5% match but you don't hit the $18,500 IRS limit.

So you either have to choose between max match or max IRS limit? This will be harder to calculate if we get any bonus, work extra hours, cash out vacation hours, take a leave, etc.
 

Unsure90

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Nov 10, 2008
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Am I doing this right? Say you make 120k. The max company match is $6000/year ($230.77/paycheck).

16% contribution = $19,200/year ($738.46/paycheck), your last paycheck contribution will get cutoff at $18,500 and you don't get the full 5% company match for the year. You'll only get $39.5 match for your last paycheck.

15% contribution = $18,000/year ($692.31/paycheck), you get the maximum 5% match but you don't hit the $18,500 IRS limit.

So you either have to choose between max match or max IRS limit? This will be harder to calculate if we get any bonus, work extra hours, cash out vacation hours, take a leave, etc.
Maybe you can change your contribution rate mid-year to maximize your gains and minimize your loss? So in your scenario the best option would be to utilize a 16% contribution rate for 10 paychecks ($738.46 * 10 paychecks = $7,384.60) and then switch to a 15% contribution rate for the remaining 16 paychecks in the year ($692.31 * 16 paychecks = $11,076.96). Your total 401k contribution would be $18,461.56 for the year.

with holiday, bonus, extra hours, etc you would just have to do a lot of monitoring and rate changing i guess..
 
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mentos

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Maybe you can change your contribution rate mid-year to maximize your gains and minimize your loss? So in your scenario the best option would be to utilize a 16% contribution rate for 10 paychecks ($738.46 * 10 paychecks = $7,384.60) and then switch to a 15% contribution rate for the remaining 16 paychecks in the year ($692.31 * 16 paychecks = $11,076.96). Your total 401k contribution would be $18,461.56 for the year.

with holiday, bonus, extra hours, etc you would just have to do a lot of monitoring and rate changing i guess..
I guess choosing the max match (free money) is better than hitting the 18.5k limit. What a pain.
 

WVUPharm2007

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Why can't we just take out $711 per check, they match however the hell they want to do it, and that just be that?
 
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ldiot

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Previously you could contribute a flt dollar amount, and if you front-loaded your contribution they would deposit the match either at the end of each quarter or at the end of the year (can't remember which).

Apparently now you must contribute a percentage (not a flat dollar amount) and they will not adjust the match later if you hit the IRS limit early? Really dumb. The percentage thing would be a pain in the butt for people who pick up extra shifts
 

mentos

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Previously you could contribute a flt dollar amount, and if you front-loaded your contribution they would deposit the match either at the end of each quarter or at the end of the year (can't remember which).

Apparently now you must contribute a percentage (not a flat dollar amount) and they will not adjust the match later if you hit the IRS limit early? Really dumb. The percentage thing would be a pain in the butt for people who pick up extra shifts
Yes that is correct, nothing surprises me with this company anymore. This is a sneaky way for them to give out less of a match. If they straight up lowered the match from 5% to 4%, then everyone would cry foul. This way, only few of us will notice.

Though this should have been expected, since they changed the HSA company contribution from lump sum every 6 months to a little bit every 2 weeks.

There were probably some Rphs who front loaded the 18k in the beginning of the year, qualified for the full match, took the lump sum HSA company contribution, and quit after a couple months.

The things this company does to save money... They switched from normal rx bags to thin flimsy ass bags that rip apart as soon as they're placed in the waiting bin. Half of the labels don't stay stapled to the bags cause they're so flimsy. It's only a matter of time before a tech sees a label on the floor and staples it to someone else's labelless bag.
 
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stevephhs016

Zug Zug
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Jan 27, 2008
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So can anyone eli5? I used my annual salary to calculate my % contribution to get $18500. Now, how would you do so now?
 

WVUPharm2007

imagine sisyphus happy
15+ Year Member
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Born: Parkersburg, WV | Now: Montgomery TWP, PA
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So can anyone eli5? I used my annual salary to calculate my % contribution to get $18500. Now, how would you do so now?
That's what you do now. There's a little tool that calculates it for you. You can only do whole percentages, though. Long story short, they are probably going to get away with not matching the full 5% due to rounding and paid holidays and such.