Catch up rule for Roth
For a 401K, I understand that as of this year, any catch up contributions need to be Roth. At the beginning of the year, I calculated the percentage mix I needed to max both traditional and my catchup Roth - ensuring I would finish the contributions in my last, and get my full company match.
This past paycheck, I noticed my deductions had changed and my mix was reversed (this turns out to be a coincidence). My payroll department is saying that because I reach the combined 24,500 limit, all subsequent contributions will be directed to Roth until the catchup is maxed. At which point , they would then revert back to my previous settings.
First question, why would they do it this way, given I had not maxed out either limit yet? It had an impact on my paycheck because of the tax difference.
Next, if I didn’t take any action at this point, when my designated mix resumes, it would be directed in a final mix that I definitely would not want. Am I correct to just change my mix now to ensure the rest goes back to traditional?
Finally, at the same time, I notice that my employer match mix has changed. Even though I had a mix of Roth and Trad up to this point, it was previously all going to traditional bucket. Now, my paystub shows a portion of the last match has started going to into what is labeled as “R 401K match”. Is this right and wouldn’t it have tax consequences for me at year end?
Thanks for your internet input and expertise.