The maximum amount you can contribute to your 401(k) plan each year is set by the Internal Revenue Service (IRS). For 2023, the 401(k) contribution limit is $22,500. This limit applies to both employee contributions and employer matching contributions. If you are age 50 or older, you can make catch-up contributions of up to $7,500. The 401(k) contribution limit is indexed for inflation each year, so it is likely to increase in the future.
What is the Max 401k Contribution?
The maximum amount employees can contribute to their 401(k) plans is set by the Internal Revenue Service (IRS) and is adjusted annually for inflation. The limit for 2023 is $22,500, up from $20,500 in 2022.
The Employer Matching Limit
- Employers can choose to match their employees’ contributions to a 401(k) plan up to a certain limit.
- The employer matching limit for 2023 is 100% of the employee’s contribution, up to a maximum of $6,500.
- Some employers may offer a matching contribution that is less than 100% of the employee’s contribution.
- The employer matching limit applies to all contributions made by the employee, including both pre-tax and Roth contributions.
The table below summarizes the key 401(k) contribution limits for 2023:
| Employee Contribution Limit | Employer Matching Limit | |
|---|---|---|
| 2023 | $22,500 | $6,500 |
The IRS Yearly Contribution Limits
The IRS sets limits on how much money you can contribute to a 401(k) plan each year. These limits are adjusted annually to keep pace with inflation. For 2023, the contribution limits are as follows:
- Employee elective deferrals: Up to $22,500 ($30,000 for those age 50 or older)
- Employer matching contributions: Up to 100% of your elective deferrals, or up to $66,000 for 2023 ($73,500 for those age 50 or older)
- Total annual contributions: Up to $66,000 ($73,500 for those age 50 or older)
It is important to note that these limits are per person, per year. This means that if you have multiple 401(k) plans, the total amount you can contribute across all plans is still limited to the annual limit.
| Contribution Type | Age < 50 | Age 50 or Older |
|---|---|---|
| Employee Elective Deferrals | $22,500 | $30,000 |
| Employer Matching Contributions | 100% of elective deferrals | 100% of elective deferrals |
| Total Annual Contributions | $66,000 | $73,500 |
What is the Max 401k?
The maximum amount you can contribute to a 401(k) in 2023 is $22,500. This includes both employee contributions and employer matching contributions. If you are age 50 or older, you can make catch-up contributions of up to $7,500 in 2023.
Age-Based Catch-Up Contributions
- If you are age 50 or older, you can make catch-up contributions of up to $7,500 in 2023.
- Catch-up contributions are not subject to the annual contribution limit for regular 401(k) contributions.
- Catch-up contributions can be used to make up for lost contributions in earlier years when you were not eligible to make the maximum contribution.
The following table shows the maximum 401(k) contributions for different ages in 2023:
| Age | Maximum Contribution |
| Under 50 | $22,500 |
| 50 or older | $30,000 |
How Much Can You Contribute to a 401(k)?
The maximum amount you can contribute to a 401(k) plan in 2023 is $22,500. This limit is up from $20,500 in 2022. If you are age 50 or older, you can make an additional catch-up contribution of $7,500, for a total maximum contribution of $30,000 in 2023.
How to Track Your Contributions
It is important to track your 401(k) contributions so that you do not exceed the annual limit. You can do this by:
- Checking your pay stubs
- Logging into your 401(k) account online
- Calling your 401(k) provider
If you exceed the annual limit, you will be subject to a 6% excise tax on the excess amount.
| Age | Contribution Limit | Catch-Up Contribution Limit |
|---|---|---|
| Under 50 | $22,500 | $0 |
| 50 or older | $22,500 | $7,500 |
Alright folks, that’s the scoop on the max 401k contribution limits. We hope this article has helped you get a clear picture of how much you can contribute to your retirement savings. Remember, every dollar you contribute now can grow into a substantial nest egg down the road. So, start planning, start saving, and let’s all work towards a financially secure future. Thanks for reading, and be sure to check back in later for more financial insights and tips!