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.
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