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Understanding 401(k) Contribution Limits in 2023 and 2024: Maximizing Your Retirement

Lendstart Updated: January 17, 2024 • 3 min read
401(k) Contribution Limits 2023 and2024

Key Points:

  • Employee 401(k) contributions are capped at $22,500 in 2023 and $23,000 in 2024, with higher total limits including employer contributions.

  • For those 50+ in both years, an additional $7,500 catch-up is allowed.

  • Start early, utilize employer matches, and increase contributions over time for optimal 401(k) growth.

Retirement planning is essential, and 401(k) plans are key. This article focuses on the updated contribution limits for 401(k) plans in 2023 and 2024, providing essential information for maximizing retirement savings.

401(k) Contribution Limits for 2023

For 2023, the maximum employee contribution limit for 401(k) plans is $22,500. The combined limit for employee and employer contributions is $66,000. Individuals aged 50 and over can make catch-up contributions of an additional $7,500, raising their total possible employee contribution to $30,000.

401(k) Contribution Limits for 2024

In 2024, the employee contribution limit increases to $23,000. The total combined limit for employee and employer contributions is set at $69,000. For those aged 50 and above, the catch-up contribution remains at $7,500, allowing a total employee contribution of $30,500.

Detailed 401(k) Contribution Limits

The following table provides a detailed breakdown of the 401(k) contribution limits for 2023 and 2024, including pretax and Roth employee contributions, combined employee and employer contributions, and catch-up contributions for those aged 50 and over.

  401(k) Contribution Limit for 2023 401(k) Contribution Limit for 2024
Pretax and Roth Employee Contributions $22,500 $23,000
Employee and Employer Contributions $66,000 $69,000
Catch-up Contributions (50 and over) $7,500 (Total $30,000 for employees) $7,500 (Total $30,500 for employees)
  • Pretax and Roth Employee Contributions: The maximum amount an employee can contribute from their salary to a traditional or Roth 401(k) plan.
  • Employee and Employer Contributions: The total combined contribution limit includes employee and employer-matching contributions.
  • Catch-up Contributions: For participants aged 50 and over, this additional amount can be contributed beyond the standard employee limit.

Roth 401(k) Contribution Limits

Roth 401(k) contribution limits for 2023 and 2024 align with traditional 401(k) limits. Participants can contribute up to the annual maximum across both Roth and traditional 401(k) plans.

Managing Multiple 401(k) Plans

The total employee contribution limit remains unchanged if you have multiple 401(k) plans with different employers. For example, in 2023, you can split a maximum of $22,500 between the plans, and in 2024, the split can total up to $23,000.

After-Tax 401(k) Contribution Opportunities

After reaching the maximum pre-tax/Roth contribution, you may be able to make additional after-tax contributions up to the combined limit. For instance, in 2024, if you contribute $23,000 and your employer contributes $20,000, you could add up to $26,000 in after-tax contributions, totaling $69,000.

Consequences of Over-Contribution

Over-contributing to your 401(k) can result in penalties, including a 10% fine and taxes on excess contributions. It's important to request the return of any excess contributions by April 15 to avoid these penalties.

401(k) Related Articles

Strategies to Maximize Your 401(k) Contributions

Maximizing your 401(k) contributions is a strategic approach to ensuring a secure and comfortable retirement. Here are several key strategies to help you make the most of your 401(k) plan:

  1. Start Early and Contribute Regularly: The earlier you start contributing to your 401(k), the more time your money has to grow through compound interest. Even small contributions can add up significantly over time.
  2. Maximize Employer Match: Many employers offer matches to your 401(k) contributions up to a certain percentage of your salary. Always contribute at least enough to get the full employer match; it's essentially free money and an immediate return on your investment.
  3. Increase Contributions Gradually: Each year, try to boost your contribution rate. This can be aligned with salary increases, bonuses, or debt repayment. Contributions are increased by 1% or more annually.
  4. Take Advantage of Catch-Up Contributions: If you are 50 or older, you're eligible for catch-up contributions, which allow you to save more in your 401(k) beyond the standard contribution limit. This can significantly boost your retirement savings.
  5. Monitor and Adjust Your Investment Choices: Pay attention to the investment options within your 401(k) and adjust them according to your retirement goals and risk tolerance. As you get closer to retirement, you might want to shift to more conservative investments.
  6. Avoid Early Withdrawals: Withdrawing funds from your 401(k) before retirement reduces your savings and incurs penalties and taxes. To maximize its growth potential, try to leave your 401(k) untouched.
  7. Automated Contributions: Setting up automatic contributions can help ensure consistent retirement savings without thinking about it each pay period.
  8. Stay Informed About Contribution Limits: Be aware of annual contribution limits and plan to maximize your contributions accordingly. If the limits increase due to inflation adjustments, consider increasing your contributions.
  9. Diversify Your Investments: Diversification can help manage risk in your portfolio. Ensure your investments are spread across asset classes like stocks, bonds, and mutual funds.
  10. Seek Professional Advice: Consider consulting with a financial advisor for personalized advice based on your financial situation and retirement goals.


Understanding and utilizing the 401(k) contribution limits for 2023 and 2024 is crucial for effective retirement planning. By strategically maximizing contributions, individuals can significantly enhance their retirement readiness.


What is the 401k annual salary limit for 2023?

The maximum employee contribution to a 401(k) in 2023 is $22,500.

What happens if you exceed 401k limit?

If you exceed the 401(k) limit, you may face tax penalties, and excess contributions must be withdrawn to avoid double taxation.

What percentage should I contribute to my 401k per paycheck?

A common recommendation is to contribute 10-15% of your paycheck to your 401(k), but this depends on your financial situation and retirement goals.

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