How much can you contribute to your 401(k) plan? The average 401(k) contribution in 2023 was 7.4% of salary, according to Vanguard's How America Saves 2024 report. But depending on your income, you may be able to contribute more – up to the annual limit that the IRS sets.
» MORE: How much should I contribute to my 401(k)?
401(k) contribution limits 2024
The 401(k) contribution limits for 2024 are $23,000 for individuals under 50, and $30,500 for those 50 and older. These limits are adjusted annually for cost-of-living increases, and exceeding the limits could result in penalties if not addressed.
2024 401(k) contribution limits | |
|---|---|
Employee contribution limit | $23,000. |
Catch-up contribution limit for individuals age 50 and older | $7,500. |
Maximum employee and employer contribution | Cannot exceed the lesser of $69,000 for those under 50 ($76,500 for those 50 and up) or 100% of employee compensation. |
Starting in January 2025, people age 60-63 will be able to make catch-up contributions of $10,000, and the limit will be indexed for inflation.
Use the calculator below to see how you contributions can grow.
401(k) contribution calculator
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Does my employer match count toward 401(k) limits?
No. If your employer offers a match for 401(k) contributions, those contributions don't count toward your individual limit. However, the total of your contributions and your employer's can't exceed the combined IRS limit. The 2024 combined limit for employee and employer contributions is $69,000 for those under 50 and $76,500for those 50 and older.
Roth 401(k) contribution limits
The contribution limits for a Roth 401(k) plan are the same as with a traditional 401(k); $23,000 for individuals under 50, and $30,500 for those 50 and older.
If you have both Roth and traditional 401(k)s, you can contribute to both every year as long as the total contributions don't exceed the IRS limits for the year. That means between the two accounts, in 2024 you can contribute a combined max of $23,000 if you're under 50, or $30,500 if you're 50 or older.
» MORE: Compare Roth 401(k)s vs. traditional 401(k)s.
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 $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 can be a good 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 2024 is $7,000 for those under 50, or $8,000 if you’re 50 or older. You can make contributions to a 2024 IRA for the current year until the tax filing deadline in 2025.
» Ready to get started? Find the best IRA account for you.
Can I contribute 100% of my salary to my 401(k)?
It depends on what your salary is. The maximum individuals can contribute is $23,000 for those under 50, and $30,500 for people 50 and older.
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. If your plan allows excess deferral distributions, the plan administrator will return the money, and any earnings, to you, and file a 1099-R for the year the excess contribution was distributed.
» MORE: What to do when you contribute too much to a 401(k).
If you don’t catch the mistake before the tax-filing deadline, you may have to pay taxes twice on the amount you contributed over the limit. That’s because the excess contribution is taxable in the year it was made, and because the IRS will still count that money as taxable in the year it’s distributed, too. Any earnings are also taxable in the year they are distributed, the IRS says .
» Looking to cash out? Learn the 401(k) withdrawal rules.
