Is 401(k) Front-loading worth it?

While writing the post about front-loading my 401(k) contributions a couple weeks ago, I made some additional calculations that I thought were interesting enough to share in a separate post.

In the post, I used a theoretical example using a single fund, VTSAX, over a 10 year period.  After 10 years of front-loading the annual contributions by March of every year, the final 401(k) balance was $10k larger, a 3% difference.  

However remember, that was over a 10 year period, meaning our annual average return is more like .3%.

Is that enough of a boost to balance out the cons of front-loading?

Comparing Year-Over-Year

To get a better idea of what’s going on, let’s take a look at the year-over-year difference.  To make things easy, we’re using the following assumptions:

  • We front-load within the first 3 months of the year.
  • We include the headwind of a .7% 401(k) administration fee.
  • To make the math simple, contributions are made on the last day of each month:
Year (Limit) Dec. 31st Balance
Dec. 31st Balance
(no front-loading)
YOY Difference YOY %
2010 ($16.5k) $19,033 $18,633 $401 2.43%
2011 $(16.5k) $34,853 $34,862 $-409 -2.48%
2012 ($17k) $58,145 $57,815 $339 1.99%
2013 ($17.5k) $98,731 $96,595 $1,806 10.32%
2014 ($17.5k) $129,836 $126,476 $1,224 6.99%
2015 ($18k) $147,164 $143,835 $-31 -0.17%
2016 ($18k) $185,348 $180,171 $1,848 10.27%
2017 ($18k) $243,999 $236,654 $2,168 12.04%
2018 ($18.5k) $246,592 $239,518 $-271 -1.47%
2019 ($19k) $342,405 $332,042 $3,289 17.31%

A couple observations:

  • In three of the years we actually lost money doing front-loading: 2011, 2015, and 2018.  Don’t expect it to work every year.
  • Four years had greater than 10% year-over-year improvement with front-loading.
  • I don’t show it here, but I found the headwind of the 401(k) administration fee can make a difference.  Without the fee, 2015 wouldn’t have been a losing year.

Those are some impressive year-over-year deltas.  

Comparing Front-Loading Speed

What if we play with how fast we front-load? Does it make a difference if we front-load by the end of March instead of June?

The following table shows the annual average return difference over the same 10-year time period.  This chart plays with different speeds of maxing out the annual contribution.  Each column is what month front-loading was concluded by. I used an image because it showed the heat-map so well.   

Front-loading makes a bigger impact if you’re done by March than if you’re done by July.  But front-loading everything by January 31st would require an annual income of at least 250k (includes payroll taxes but no benefit deductions).  That’s probably out of reach for most, but many could front load it by March 31st or early April.

However, over time it’s still only a fraction of the total return.  Getting to the point of maxing out 401(k) contributions is going to have more of an effect on the account balance than front-loading ever will.

Front-loading does take some of the bite out of the .70% annual administration fee.


I’m going to continue front-loading 401(k) contribution for the foreseeable future. Changes in my situation, say an anticipated employment change or the introduction of a match to my 401(k) may lead to modifying the strategy, but for now I think it’s worth it to me.

Hasta luego!

5 thoughts on “Is 401(k) Front-loading worth it?

    1. The admin fee of .70% is on top of the .05% to the 401(k) company’s index fund expense ratios. Believe me, when my employment status changes, I’ll be rolling that money out ASAP.

  1. I have not had the stomach to do a multi-year comparison like this, but I like it. 2019 was certainly a banner year to front-load. According to my calculations, I netted an extra $952.54 from front-loading. I totally botched it, though, and I didn’t get my request in to HR in time to hit my first paycheck 1/4/2019 which would have been the best date to get it in. That would have gotten me much closer to your numbers above.

    I have wondered if it was worth the “administrative” effort of understanding the concept and getting the requests into HR and if that time would be better used for something else. Not to mention some of the minor risks (i.e. job change) you outlined in the other post. That said, your numbers above seem to further support it is worth the effort. I am very happy I didn’t front-load this year : )


    1. I wonder if 2020 will work out for front-loading or not. But it’s hard to figure out which years it’s going to work and which it isn’t so I figure I’m “dollar cost averaging” it over the years.

      BTW, thanks for posting on these posts. I saw your post about not front-loading this year and that’s part of what triggered the in depth thinking here.

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