Are You Actually on Track to Max Out Your Retirement Plans?

In January, a 47-year-old physician logs into the hospital’s payroll system and sets her 403(b) contribution percentage. Based on her expected compensation, the percentage appears sufficient to reach the annual employee-deferral limit by the end of the year.

She submits the election and returns her attention to patients, call schedules, and everything else competing for her time. Retirement contributions now feel automated—and therefore handled.

By late September, the retirement-plan website shows that a substantial amount has entered the account. At first glance, she appears to be on track. But the number displayed includes employer contributions alongside her own payroll deferrals.

When she separates the two, she discovers that only $15,680 has been contributed from her compensation. Seven paychecks remain, and her current election is producing $950 per paycheck.

The percentage is still active. Payroll is still processing it correctly. It simply is not producing the year-end result she expected.

The reasonable first question is:

What percentage am I contributing?

The better question is:

Given what I’ve already contributed and the paychecks I have left, where am I actually going to finish the year?

Why This Matters

For 2026, the employee elective-deferral limit for most 401(k), 403(b), and governmental 457(b) plans is $24,500. Reaching that amount, however, is not guaranteed simply because a contribution percentage was selected in January.

A payroll election is applied to compensation according to the employer’s plan and payroll procedures. An election may take effect one paycheck later than expected, and certain bonuses or productivity payments may be treated differently from regular salary. A compensation change can also alter the dollars contributed even when the percentage never changes.

The account display can create another source of confusion. Employer matching and other employer contributions may appear alongside the employee’s salary deferrals, making the year-to-date contribution total look larger than the amount actually contributed by the employee.

Those employer dollars are valuable, but they generally do not reduce the basic $24,500 employee elective-deferral limit. Employee deferrals and total plan contributions are subject to different limits, as explained in the IRS contribution guidance.

The question is therefore not whether money is entering the account. It is whether the employee’s actual contributions are still moving at the pace required to reach the intended year-end amount.

The Diagnosis

Return to the physician with $15,680 of employee deferrals and seven paychecks remaining. To reach the $24,500 limit, another $8,820 would need to be contributed before the end of the year.

Dividing that amount across seven remaining paychecks produces a required contribution of approximately $1,260 per paycheck.

Her current election is producing only $950. If nothing changes, the remaining seven contributions will add $6,650, bringing her projected year-end employee contribution to approximately $22,330.

That leaves a projected shortfall of $2,170.

There was nothing inherently unreasonable about the percentage she selected in January. The election may have started later than she expected, or the compensation used in her original estimate may not have matched the compensation to which payroll actually applied the deferral percentage.

What matters in September is not whether the original election made sense. It is whether the election still produces the intended result with the payrolls that remain.

The diagnosis: A contribution election is an instruction to payroll. It is not confirmation that the year-end result will match the plan.

The Treatment

A better retirement-contribution review starts with the employee deferrals that have actually reached the plan. Employer matching contributions should be identified separately so the account’s combined total is not mistaken for the employee’s progress toward the elective-deferral limit.

The next step is to connect the remaining contribution room to the remaining payroll calendar. In this case, the physician needs another $8,820 across seven paychecks. That calculation provides a much clearer picture than the contribution percentage by itself.

Before changing the election, the physician also needs to understand how quickly payroll can implement the adjustment and which forms of compensation are eligible for deferral. A contribution change submitted today may not necessarily affect the next paycheck, and a percentage applied to regular salary may not be applied identically to a bonus or productivity payment.

Traditional and Roth salary deferrals generally share the same employee elective-deferral limit. Dividing contributions between the two tax treatments does not create another $24,500 of contribution room.

Contributions from an earlier employer may also matter. Employee elective deferrals to 401(k) and 403(b) plans generally must be combined when determining whether the annual personal limit has been reached. Changing employers during the year does not ordinarily provide a fresh employee-deferral limit.

A governmental 457(b) is treated differently and generally has its own deferral limit. That distinction is one reason healthcare professionals with access to both a 403(b) and a governmental 457(b) should track the plans separately rather than treating every workplace account as part of one contribution calculation.

The employer’s matching formula deserves attention before contributions are accelerated. Some plans calculate matching contributions one paycheck at a time. If an employee reaches the annual limit early and stops contributing, later matching contributions could be affected unless the plan provides an appropriate year-end true-up.

The objective is not simply to contribute faster. It is to adjust the payroll instructions—if an adjustment is appropriate—without overlooking contribution limits, implementation timing, tax treatment, or the employer’s matching provisions.

Practical Takeaways

• Separate employee deferrals from the account’s total contributions. Employer matching or other employer contributions can make the displayed year-to-date total look larger than the amount contributed from your compensation.
• Count the remaining payrolls. Compare your actual employee deferrals with the intended annual amount, then calculate what the current election is likely to produce by year-end.
• Review the plan before accelerating contributions. Payroll timing, eligible compensation, prior-employer contributions, and the employer’s matching formula can affect whether an adjustment works as expected.

Bottom Line

The physician in this case made an election that appeared reasonable in January and continued contributing throughout the year. Nothing stopped working. The percentage simply was not producing the result she believed it was producing.

A retirement contribution percentage is only the starting instruction. If the objective is to reach a particular annual amount, the more useful measurement is the employee dollars already contributed, the payrolls remaining, and where the current election is likely to finish.

A short calculation before year-end can reveal a gap while there may still be time to understand the available options and how a change could affect the rest of the plan.

What else does it touch?

Continue Learning