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The 2023 401(k) contribution limit is $22,500 for people under 50.
The 2024 401(k) contribution limit is $23,000 for people under 50.
People 50 and over can contribute an extra $7,500 to their 401(k) plan in 2023 and 2024.
Contributing enough to your 401(k) plan to meet your employer's match is an easy way to save for retirement, but that doesn't mean you can't contribute more. When planning how much to contribute to your 401(k) plan, keep in mind that the IRS sets a limit on how much you can add to your 401(k) plan every year, and exceeding that could result in extra tax penalties if not addressed.
401(k) contribution limits 2023
In 2023, the 401(k) contribution limit is $22,500 for employees, or $30,000 for employees age 50 or older and can make catch-up contributions.
401(k) contribution limits 2024
For 2024, those limits rise to $23,000, and $30,500 for those 50 and older due to catch-up contributions.
Employee contribution limit
Catch-up contribution limit for individuals age 50 and older
Maximum employee and employer contribution
Cannot exceed the lesser of $66,000 or 100% of employee compensation, whichever is less.
Cannot exceed the lesser of $$69,000 or 100% of employee compensation, whichever is less.
» Crunch the numbers: Use our free 401(k) calculator to see if you're saving enough for retirement.
Does my employer match count toward 401(k) limits?
If your employer offers a match for 401(k) contributions, the good news is that those contributions don't count toward your individual limit. However, the total of your contributions and theirs can't exceed the combined limit as set out by the IRS. The 2023 combined limit for employee and employer contributions is $66,000. For 2024, this limit is $69,000.
Can I max out both my 401(k) and Roth 401(k)?
If you have both a 401(k) plan and Roth 401(k) plan, you can contribute to both every year as long as the total contributions don't exceed the IRS limit for the year. For 2023, the limit is $22,500. If you’re choosing between the two, learn about the differences between a Roth and traditional 401(k).
Are there income limits for 401(k)s?
While there's no universal income limit on 401(k) contributions, in some cases the IRS does impose contribution limits on "highly compensated employees" when a company encounters disproportionate contribution levels among its workers. The IRS has a test that helps employers who sponsor 401(k) plans to assess whether employees are participating in their plan at levels proportionate to their compensation.
If the test determines that people across compensation levels aren't participating in a manner the IRS deems proportionate, employee contribution levels for highly compensated employees can be lowered. In these cases, your employer may need to return some of your excess contributions.
The IRS defines a highly compensated employee in one of two ways:
An individual who either owned more than 5% of the interest in a business at any time during the year or the preceding year, no matter how much they were paid.
An individual who received over $150,000 from the business in the preceding year in 2023, or $155,000 in 2024, and, if the employer ranks employees by compensation, was in the top 20%.
Can I have a 401(k) and an IRA?
Yes. You can have both a 401(k) and an IRA. IRAs make a great supplement to retirement savings, especially if you’re contributing enough to receive a full match from your employer, or you’re planning on maxing out your 401(k). The annual contribution limit for an IRA in 2023 is $6,500; $7,500 for those 50 and up. In 2024, the IRA contribution limit rises to $7,000, or $8,000 if you’re 50 or older. And you can make contributions to an IRA for 2023 until April 15, 2024.
» Find the best IRA account for you
What happens if I exceed my 401(k) limit by mistake?
If you contribute too much to your 401(k) and notice your mistake before the tax filing deadline, you can probably correct it with your employer. You’ll need to notify your plan administrator. They’ll return the excess money to you, and you’ll get a new W-2 and pay taxes on your new total taxable wages.
If you don’t catch the mistake before tax day, you may have to pay taxes twice on the amount you contributed over the limit. That’s because the excess contribution can’t be deducted from your taxes in the year it was made, and because the IRS will still count that money as taxable when it’s distributed, too.
» Read more about what to do when you contribute too much to a 401(k)