. drake
Individual Contribution Limits
The maximum amount you can contribute to your 401(k) is set by the IRS and is subject to annual adjustments. The limit applies to both employee contributions and employer matching contributions.
- For 2023: $22,500 (plus a catch-up contribution limit of $7,500 for participants age 50 or older)
- For 2024: $23,500 (plus a catch-up contribution limit of $8,000 for participants age 50 or older)
It’s important to note that these limits apply to the total amount of money you can contribute to all of your 401(k) plans. If you have multiple 401(k) accounts, you cannot contribute more than the annual limit across all of them.
The table below provides a summary of the maximum 401(k) contribution limits:
| Year | Contribution Limit | Catch-Up Contribution Limit (Age 50 or Older) |
|---|---|---|
| 2023 | $22,500 | $7,500 |
| 2024 | $23,500 | $8,000 |
Maximum 401(k) Contributions
The annual contribution limit for 401(k) plans is set by the Internal Revenue Service (IRS) and is adjusted periodically. For 2023, the contribution limit is $22,500 for employees under the age of 50, and **$30,000** for those aged 50 and over (catch-up contributions).
Employer Matching Limits
In addition to employee contributions, employers may also contribute to their employees’ 401(k) plans. The maximum amount that an employer can contribute is subject to the following limits:
- Matching Contributions: Up to 100% of the employee’s elective deferrals, subject to an overall limit of $66,000 (including employee contributions) in 2023.
- Profit-Sharing Contributions: Up to 25% of the employee’s compensation, regardless of whether the employee contributes to the plan.
Contribution Allocation
| Contribution Type | 2023 Limit |
|---|---|
| Employee Elective Deferrals | $22,500 ($30,000 for age 50+) |
| Employer Matching Contributions | up to 100% of employee deferrals, subject to $66,000 limit |
| Employer Profit-Sharing Contributions | up to 25% of employee compensation |
Maximum 401k Contribution Limits
The maximum 401(k) contribution limits set by the Internal Revenue Service (IRS) for 2023 are as follows:
- Employee Contribution Limit: $22,500 per year
- Employer Matching Contribution Limit: $30,000 per year
- Total Contribution Limit (Employee + Employer): $66,000 per year
Catch-Up Contributions
Individuals who are age 50 or older by the end of the calendar year can make catch-up contributions to their 401(k) plans in addition to the regular limits.
- Catch-Up Contribution Limit: $7,500 per year
- Total Contribution Limit (Employee + Employer + Catch-Up): $73,500 per year
| Age | Employee Contribution Limit | Catch-Up Contribution Limit | Total Contribution Limit |
|---|---|---|---|
| Under 50 | $22,500 | $0 | $66,000 |
| 50 and over | $22,500 | $7,500 | $73,500 |
Contribution Limits
The maximum amount you can contribute to your 401(k) plan varies based on your age and employment status. For 2023, the limits are as follows:
- Under age 50: $22,500
- Age 50 or older: $30,000
Age-Based Enhancements
Individuals who are age 50 or older can make additional “catch-up” contributions to their 401(k) plans. These contributions are not subject to the regular contribution limits:
For 2023, the catch-up contribution limit is $7,500.
The total maximum contribution for individuals age 50 or older is $37,500 ($30,000 regular limit + $7,500 catch-up limit).
Contribution Allocation
Your 401(k) contributions can be allocated to various investment options, such as stocks, bonds, and mutual funds. The specific investment options available to you will depend on the plan offered by your employer.
| Contribution Type | 2023 Limit |
|---|---|
| Regular Contribution (under age 50) | $22,500 |
| Regular Contribution (age 50 or older) | $30,000 |
| Catch-Up Contribution (age 50 or older) | $7,500 |
Well, there you have it. The scoop on maxing out your 401(k) contributions. Remember, it’s not just about the numbers, it’s about securing your financial future. So, take advantage of this tax-advantaged savings vehicle and work towards a comfortable retirement. Thanks for tuning in, and swing by again for more financial wisdom!