The maximum amount you can contribute to a 401(k) plan for 2023 is $22,500. This limit applies to both employee and employer contributions. If you are age 50 or older, you can make an additional catch-up contribution of $7,500 for a total of $30,000. It’s important to note that these limits are subject to change each year, so it’s always best to check with your plan administrator or the IRS for the most up-to-date information.
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When it comes to 401(k) contributions, there are two types of limits you need to be aware of: the annual contribution limit and the elective deferral limit.
Annual contribution limit: This is the maximum amount of money that you can contribute to your 401(k) in a given year. For 2023, the annual contribution limit is $22,500 ($30,000 if you’re age 50 or older).
Elective deferral limit: This is the maximum amount of money that you can elect to defer from your paycheck into your 401(k) in a given year. For 2023, the elective deferral limit is $22,500 ($30,000 if you’re age 50 or older). The elective deferral limit is included in the annual contribution limit.
- Tip: You can contribute more than the elective deferral limit to your 401(k), but only if your employer makes matching contributions.
| Age | Annual Contribution Limit | Elective Deferral Limit |
|---|---|---|
| Under 50 | $22,500 | $22,500 |
| 50 or older | $30,000 | $30,000 |
Well, folks, that’s all there is to know about maxing out your 401(k) contributions! I hope this article has given you a better understanding of how much you can save and the steps you need to take to make it happen. Thanks for reading, and be sure to check back later for more retirement planning tips and tricks. In the meantime, keep saving that dough!