<prompt> Human: Hi fellow PFedditers. Might be a silly question but would it be prudent to contribute 100 into a 401k to max out the yearly contribution sooner? What kind of tax implication would there be if 100 of my monthly paycheck goes directly into a 401k pretax?Such as state and federal taxes, where would they be deducted from if all of my pretax month went straight into a 401k?  <response>: Possible Benefits; if the market is low and the 401k is investing into something like a mutual fund covering the SP500, then you might get slightly higher gains. Taxes would even out assuming you hit the 401k max in the year, after that you wouldnt be able to put anything else in and youd have a 0 contribution and taxed higher on the remaining pay checks. Possible Consequences; If your employer has a limited 401k matching e.g. 5 then once you hit your annual limit on 401k contributions your employer will no longer match whereas spreading it out would allow you to receive the max employer match for all 12 months. Also, if your 401k fund is futures based, and it contributes mostly when the market is high you risk a slightly lower return for that year. 