I know that it is a retirement account, so why cant someone put like $10,000 in at once if they have the cash? Also what happens if you do overpay, why is it even possible to overpay in the first place?
In: Economics
TLDR: A 401k allows you to exclude some of your earnings from income tax until you retire. If there was no limit than higher earners would throw all their money in there and wouldn’t pay income tax.
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