Total 401k Contribution Limits (Employer + Employee)
While the standard contribution limit focuses on your contributions, an even higher overall limit applies to the total amount going into your 401(k) each year. This includes both your contributions and any matching contributions made by your employer.
In 2024, the total combined contribution limit for employee and employer contributions is $69,000 (this includes catch-up contributions if you’re 50 or older). Many employers offer matching contributions, giving you “free money” for retirement. Make sure you contribute enough to take full advantage of any employer match.
Key Points:
- Employer matching contributions can significantly boost your retirement savings.
- Understand your employer’s matching policy to maximize this benefit.
- Prioritize reaching the employer match threshold before focusing on contributions beyond that amount.
Example:
If your employer matches 50% of your contributions up to $5,000, you could contribute $10,000, and your employer would add an additional $5,000. This results in a total of $15,000 going into your 401(k).
401k Contribution Limit 2024
A 401(k) is a powerful retirement savings tool many employers offer. This plan allows you to save money on a pre-tax or Roth basis and potentially benefit from employer matching contributions. Maximizing your contributions is crucial for building a substantial retirement nest egg. The IRS regularly adjusts contribution limits to keep up with inflation, and understanding the 2024 limits can help you boost your savings potential.
Table of Content
- 401k Standard Contribution Limit in 2024
- Catch-Up Contributions for Age 50+
- Total 401k Contribution Limits (Employer + Employee)
- Benefits of Maxing Out Your 401k
- Strategies for Reaching the Contribution Limit
- Conclusion
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