401(k) Spillover

401(k) Spillover - Some companies are including this new benefit into their retirement plan. With this plan, you are allowed to add to your 401(k) over the maximum amount allowable by the IRS ($18,000 in 2015). It is not pre tax like your first $18,000, but it can sit in your account for retirement nonetheless. 

The greatest benefit is to those who earn at the higher end and want to receive the full company match. Let's say that your income is $350,000 (congratulations on snagging this position!). Your employer will match 50% of your contribution, which can be up to 6% of your income (pretty standard). So, you contribute the full $18,000, yet that is only around 5% of your pay, which means your company match (at 50% of your contribution) will only be around 2.5% or $9,000. With a 401(k) spillover, you could contribute the full 6% of your pay ($21,000) and the company will be able to match the 50% of that contribution, a full 3% of your income, which is $10,500. You win by gaining a additional $1,500 in free money. Overall, your 401(k) funds will be $18,000 in pre tax funds and $13,500 will in a post tax portion of the account.