Because 401(k)s are tax-advantaged, they have a maximum annual contribution limit set by the IRS each year. That limit was increased by $500 in 2018.
401(k) contribution limits for 2018
|Age||2018 401(k) contribution limit|
|50 or older||$24,500|
Note that the amounts above are the “elective deferral limit” — the amount you, as an employee, are allowed to contribute out of your salary each year. Employer matching dollars do not count toward that limit.
» Planning to max out? Continue saving for retirement in an IRA
The 401(k) also has a total contribution limit, which includes the money you contribute and any employer matching dollars. In 2018, your total 401(k) contributions — from yourself and your employer — cannot exceed $55,000 or 100% of your compensation, whichever is less. That limit rises to $61,000 for those 50 or older.