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401k Contribution Limit 2024

Last Updated : 17 Apr, 2024
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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.

401k Standard Contribution Limit in 2024

In 2024, the IRS has increased the standard employee contribution limit for 401(k) plans to $23,000. This marks a $500 increase from the 2023 limit of $22,500.

  • What It Means: This increase allows you to save even more for your retirement. Every dollar you contribute now has the potential to grow significantly over time through compound interest.
  • Pre-tax vs. Roth: This limit applies to the total amount you can contribute to your 401k each year, regardless of whether you choose traditional (pre-tax) or Roth contributions.
Contribution Type 2023 Limit 2024 Limit
Pretax and Roth employee contributions $22,500 $23,000
Employee and employer contributions $66,000 $69,000
Catch-up contributions (in addition to the employee and employer limit) $7,500 $7,500

Example: If you’re 55 years old and maximize both your standard and catch-up contributions, you could save $30,500 in your 401k for the year 2024. This significantly boosts your retirement savings potential.

Catch-Up Contributions for Age 50+

Catch-up contributions are a special provision designed to help individuals aged 50 and older accelerate their retirement savings. The catch-up contribution limit for 2024 remains at $7,500. This is the same as it was in 2023. The catch-up contribution limit is in addition to the standard $23,000 limit. This means that if you are 50 or older, you can potentially contribute a total of $30,500 to your 401(k) in 2024.

Example: If you’re 55 years old and maximize both your standard and catch-up contributions, you could save $30,500 in your 401(k) for the year 2024. This significantly boosts your retirement savings potential.

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.


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).

Benefits of Maxing Out Your 401k

Potential Tax Advantages

401(k) plans offer two primary contribution options:

  • Traditional (Pre-tax): Contributions are made with pre-tax dollars, potentially lowering your current taxable income. Taxes are deferred until you withdraw funds in retirement.
  • Roth: Contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free.
  • Choose the tax strategy (pre-tax or Roth) that aligns best with your current and anticipated future tax situation.

The Power of Compound Growth

  • The earlier you start saving and the more you contribute, the greater the potential for compound growth. Your earnings generate their earnings, creating a snowball effect over time.
  • Time is your ally – compound growth can significantly increase your retirement savings.

“Free Money” with Employer Matching

  • If your employer offers a matching contribution, it’s like getting free money for your retirement. Maxing out your 401(k) contributions, at least up to the match threshold, is a smart way to leverage this valuable benefit.
  • Never turn down “free money” – take full advantage of employer matching contributions.

Strategies for Reaching the Contribution Limit

Start Small, Scale Up

If maxing out your contributions seems daunting, start with a smaller percentage increase and gradually increase it throughout the year. Even small contributions add up over time.

Budgeting is Key

Incorporate your 401(k) contributions into your monthly budget and treat them like any other essential expense. Prioritizing your retirement savings makes reaching your goals easier.

Utilize Extra Income

If you receive bonuses, tax refunds, or other windfalls, consider directing a portion toward your 401(k) contributions. This can boost your savings without impacting your regular budget.

Automate Your Savings

Many 401(k) plans allow you to set up automatic payroll deductions. This effortless approach ensures consistent contributions and helps you avoid procrastination.

Pay Yourself First

Consider your 401(k) contribution as a way to pay yourself for your future. Treat it with the same importance as paying your bills.

Review Your Contributions with Pay Raises

When you get a pay increase, consider increasing your 401(k) contribution at the same time. This is a painless way to boost your savings.

Rebalance Throughout the Year

Check your progress periodically and adjust your contributions if needed to make sure you’re on track to reach your yearly goals.


Don’t miss out on the chance to build a more secure retirement. Take a few minutes to review your 401(k) contributions and explore ways to increase them. For tailored investment and tax planning advice, reach out to a financial advisor.

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