Half the year is gone, and if you set your 401(k) contribution to 20% in January to max out early, today is the day to check one plan feature: the 401(k) true-up. Without it, the money you front-loaded can cost you part of your employer match. With a hypothetical $180,000 salary and a common matching formula, the gap is $1,661.54 this year. The fix sounds backward. You lower your contribution rate.
Maxing out is mostly a habit of higher earners. Vanguard’s How America Saves 2026 report, released in June, found that 14% of participants hit the 2025 deferral limit, including 51% of those earning more than $150,000. Those are exactly the people most likely to front-load and most likely to get caught by the paycheck-by-paycheck match.
How a missing 401(k) true-up costs you money
Most employers calculate the match every pay period, not once a year. The most common formula in Vanguard’s plans is 50 cents per dollar on the first 6% of pay, and the match on each paycheck is based only on what you contributed from that paycheck.
The IRS caps your own deferrals at $24,500 for 2026 (plus an $8,000 catch-up if you’re 50 or older, or $11,250 if you’re 60 through 63). Once you reach the cap, your contributions stop. If the match is calculated per paycheck, it stops too, because there’s nothing left to match.
A true-up fixes that. At year end, or early the next year, the plan compares the match you received with what you would have gotten under the annual formula and deposits the difference. According to a Plan Sponsor Council of America survey cited by CNBC, about 67% of plans that match more often than once a year offered a true-up in 2023. That leaves roughly a third that don’t, and your plan document or benefits portal is the only way to know which group you’re in. Search the summary plan description for “true-up” or for language saying the match is “calculated on an annual basis.”
A worked example with a $180,000 salary
Say you earn $180,000 and get paid every two weeks, so each check is $6,923.08. Your employer matches 50% of the first 6% of pay per paycheck, which is $207.69 per check and $5,400 for the year if you contribute at least 6% on every check. You’re under 50, and your plan has no true-up.
| Contribution strategy | Your 2026 deferrals | Employer match |
|---|---|---|
| 20% all year | $24,500 | $3,738.46 |
| 20% for 13 checks, then 8% | $24,500 | $5,188.46 |
| 20% for 13 checks, then 7% | $24,300 | $5,400.00 |
| 14% all year | $24,500 | $5,326.92 |
At 20%, you contribute $1,384.62 per check and hit $24,500 partway through your 18th paycheck. The last eight paychecks of the year have no contribution and no match. Eight times $207.69 is the $1,661.54 you lose.
Now suppose it’s July 1 and you’ve had 13 paychecks at 20%. That’s $18,000 in, with $6,500 of room left. Spread over the remaining 13 checks, that’s $500 per check, or 7.22% of pay. Many plans only accept whole percentages, so you choose between 7% and 8%. At 8% you’d hit the cap one paycheck early and lose $211.54 of match. At 7% you contribute $24,300 for the year, $200 short of the limit, and collect the full $5,400.
So the best mid-year move is to cut your rate from 20% to 7%. You give up $200 of deferral room and gain $1,661.54 in employer money. Very few retirement trade-offs are this lopsided.
Front-loading still has a case, but only with a true-up
The argument for front-loading is that money invested in January has more months in the market than money invested in December. That’s true on average, and if your plan has a true-up, there’s little downside to contributing heavily early. You get the extra months, and the plan makes up the match later.
Without a true-up, the math reverses. A few months of extra market exposure on part of your contributions is very unlikely to make up for a guaranteed match. In the example, the lost match is 6.8% of your annual deferral limit, gone for certain, against an uncertain gain on early contributions.
There’s one more catch to front-loading. If you leave your job in October, you’ll have contributed most of the year’s limit and may have received only part of the match. Some plans pay a true-up only to people still employed on the last day of the plan year, so look for that condition while you’re reading the plan rules.
What to do this week
Log in to your benefits portal and find two numbers: your year-to-date contributions and the number of paychecks left in 2026. Subtract your contributions from $24,500 (or your higher limit if you qualify for catch-ups), divide by the remaining checks, and convert that to a percentage of pay. Round down if rounding up would hit the limit early. If the result is below the match threshold (6% in the example), use the threshold instead and accept that you’ll fall a little short of the maximum.
If you changed jobs this year, remember the limit is per person, not per plan. Contributions at your old employer count toward the same $24,500, so your new plan’s payroll system won’t know to stop you.
The average participant in Vanguard’s data deferred 7.6% of pay in 2025, and the average promised match was 4.7% of pay. Most savers never come close to the limit, so this only matters for a minority. For that minority, it’s one of the few retirement decisions where a five-minute change has a guaranteed, four-figure payoff.
The rest of the retirement picture
Only about 72% of private-sector workers had access to a workplace plan as of March 2025, and 53% participated, according to a Congressional Research Service summary of federal data. If you’re among the workers with a plan and a match, the match is the first dollar of retirement savings to secure, before IRAs or taxable accounts. The earlier guide to the Saver’s Credit and IRA contribution deadlines covers the IRA side, and the retirement savings guide by age helps you see whether your total savings rate is on track.
Check for a 401(k) true-up before you do anything else this month. If your plan has one, front-load freely. If it doesn’t, set your rate so your last contribution lands on your last paycheck. Plan rules vary in how they calculate the match and who qualifies for a true-up, so your HR department or a licensed financial advisor can confirm how yours works.
Sources: Vanguard, How America Saves 2026; Congressional Research Service, Worker Participation in Employer-Sponsored Pensions in 2025; CNBC on 401(k) true-up provisions; EY Tax News on 2026 retirement plan limits
