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Roth 401k Contribution Limits
Roth 401(k)s allow you to make after-tax contributions, which are then invested and can grow tax-free. Unlike traditional 401(k)s, you do not pay taxes when you withdraw funds from a Roth 401(k) in retirement. However, Roth 401(k) contributions are subject to annual limits set by the IRS:
- 2023 limit: $22,500
- 2024 limit: $23,500
- Catch-up contributions: Employees age 50 and older can make additional catch-up contributions of $7,500 for 2023 and $8,000 for 2024.
It is important to note that Roth 401(k) contribution limits are combined with traditional 401(k) contribution limits. This means that the total amount you can contribute to both types of 401(k)s in 2023 is $66,000 (or $73,500 for those age 50 and older). Contributions to both types of 401(k)s are also limited by your employer’s plan rules.
| Contribution Type | 2023 Limit | 2024 Limit |
|---|---|---|
| Roth 401(k) | $22,500 | $23,500 |
| Traditional 401(k) | $22,500 | $23,500 |
| Total 401(k) | $66,000 | $73,500 |
Contribution Limits
Roth 401(k) contributions are subject to annual limits set by the IRS. These limits apply to both employee contributions and employer matching contributions.
For 2023, the contribution limit for Roth 401(k)s is $22,500. This limit increases to $30,000 for individuals age 50 or older who make catch-up contributions.
Employer Matching Contributions
Employer matching contributions to a Roth 401(k) are not subject to the annual contribution limit. However, the total amount of employer matching contributions and employee contributions cannot exceed the overall limit of $66,000 for 2023. This limit increases to $73,500 for individuals age 50 or older who make catch-up contributions.
Here is a table summarizing the contribution limits for Roth 401(k)s:
| Type of Contribution | 2023 Limit | 50 or Older Catch-Up Limit |
|---|---|---|
| Employee Contributions | $22,500 | $30,000 |
| Employer Matching Contributions | N/A | N/A |
| Total Contributions | $66,000 | $73,500 |
Roth 401(k) Contribution Limits
Roth 401(k) contributions are made with after-tax dollars, meaning you do not receive an immediate tax deduction. However, qualified withdrawals in retirement are tax-free. The contribution limits for Roth 401(k) plans are the same as for traditional 401(k) plans.
Contribution Limits for 2023
- Employee Elective Deferrals: $22,500
- Catch-Up Contributions: $7,500 (for individuals age 50 and older)
- Employer Matching Contributions: $66,000 (or 100% of compensation, whichever is less)
The total amount you can contribute to your Roth 401(k) plan in 2023, including both employee elective deferrals and employer matching contributions, is $66,000 (or 100% of compensation, whichever is less).
Catch-Up Contributions
Individuals age 50 and older are eligible to make catch-up contributions to their Roth 401(k) plans. For 2023, the catch-up contribution limit is $7,500. This means that individuals age 50 and older can contribute up to $22,500 + $7,500 = $30,000 to their Roth 401(k) plans in 2023.
Table: Roth 401(k) Contribution Limits
| Age | Employee Elective Deferrals | Catch-Up Contributions |
|---|---|---|
| Under 50 | $22,500 | $0 |
| 50 and older | $22,500 | $7,500 |
Roth 401k Contribution Limits
Roth 401(k) contributions are limited to a certain amount per year, set by the Internal Revenue Service (IRS). These limits apply to both employee and employer contributions.
Employee Contribution Limits
For 2023, the employee contribution limit for a Roth 401(k) is $22,500. This limit increases to $30,000 for individuals age 50 or older.
Employer Contribution Limits
Employer contributions to a Roth 401(k) are subject to a separate limit. For 2023, the limit for employer contributions to all defined contribution plans, including Roth 401(k)s, is $66,000. This limit is the same for all employees, regardless of age.
Combined Contribution Limits
The employee and employer contribution limits for a Roth 401(k) are combined. For 2023, the combined contribution limit is $66,000. This means that the total amount that can be contributed to a Roth 401(k) in one year, including both employee and employer contributions, cannot exceed $66,000.
| Contribution Type | Limit |
|---|---|
| Employee contributions | $22,500 ($30,000 for age 50 or older) |
| Employer contributions | $66,000 |
| Combined contributions | $66,000 |
It’s important to note that these limits are applicable for 2023. The contribution limits for future years may be adjusted by the IRS.
Alright readers, that’s the gist of it. Roth 401k contributions have their perks and limitations. If you’re looking for a tax-advantaged retirement savings tool, they’re worth considering. But remember, there are limits to how much you can contribute. Keep an eye on those contribution limits and plan accordingly. And if you have any more money questions, don’t be shy to swing by again. We’ve got you covered!