401(k) Contribution Limits for 2024 and 2025

What Are 401(k) Contribution Limits?

401(k) contribution limits are rules that set how much money you can put into your 401(k) retirement plan each year. These limits are decided by the U.S. Congress to make sure the tax benefits are fair for everyone. Without these limits, people with very high incomes could invest large chunks of their salary just to cut down on taxes. By putting a cap on contributions, the system stays balanced.

When you contribute to a 401(k), that amount is taken out of your taxable income. This means you can save for retirement while also cutting down your tax bill. Over time, that adds up to significant savings and helps you build a solid retirement fund.

How Do 401(k) Contribution Limits Work?

The IRS sets yearly limits on how much money can go into your 401(k), both from your side and from your employer. These limits make sure that the tax benefits of a 401(k) aren’t being overused by those with higher salaries. Here’s a closer look at how it works.

1. Individual Contribution LimitsYou can only put in a certain amount of money into your 401(k) from your salary. If you have more than one 401(k) account, the total contribution across all accounts cannot go past the yearly limit.
2. Catch-up ContributionsIf you are 50 or older, the rules let you save a bit more. This is called a catch-up contribution. It gives you the chance to boost your retirement savings as you get closer to retirement. The catch-up contribution for 2024 was $7,500.
3. Overall Contribution Limits (Employee + Employer)There is also a cap on the total amount that can go into your account from both you and your employer. For 2024, the total combined contribution limit was $69,000. This does not include the extra $7,500 if you’re eligible for catch-up contributions. These overall limits also apply to small business owners and those using a solo 401(k).

401(k) Contribution Limits for 2024

• The limit for employee contributions is $23,000
• If you’re 50 or older, you can contribute an extra $7,500 as a catch-up
• The combined employee and employer contribution limit is $69,000

Age Category	Individual’s Maximum Contribution	Additional Contribution (Age 50+)	Employer’s Maximum Contribution	Combined Maximum Contribution (Employee + Employer)
Younger than 50	$23,000	Not applicable	$46,000	$69,000*
Age 50 or older	$23,000	$7,500	$46,000	$76,500*

*The total contribution cannot exceed your total earnings for the year.

401(k) Contribution Limits for 2025

If you’re saving for retirement, 2025 brings some updates you should know about. The IRS has raised contribution limits again, and there’s a special change for people aged 60 to 63 that could help you save more.

Employee 401(k) Contribution Limits for 2025

Starting in 2025, you can contribute up to $23,500 to your 401(k). That’s a $500 increase from last year. If you’re 50 or older, you still get the usual catch-up contribution of $7,500. But here’s the new part. If you’re between 60 and 63, you can now contribute a higher catch-up amount of $11,250. You can’t combine this with the $7,500 catch-up though. It’s one or the other, and the $11,250 replaces the regular amount during those years.

Employee and Employer Match Limits for 2025

Together, you and your employer can contribute up to $70,000 to your 401(k) in 2025. That’s $1,000 more than the previous limit. This combined total includes your contributions, any matching from your employer, and other additions your employer might offer.

Age Category	Individual Contribution Limit	Additional Contribution (Catch-Up)	Employer Contribution Limit	Combined Contribution Limit (Employee + Employer)
Under 50	$23,500	Not applicable	$46,500	$70,000*
50 to 59	$23,500	$7,500	$46,500	$77,500*
60 to 63	$23,500	$11,250	$46,500	$81,250*
64 and older	$23,500	$7,500	$46,500	$77,500*

*or 100% of employee compensation, whichever is less.

401(k) Contribution Limits Summary

Here’s a closer look at the rules and limits for defined contribution plans 401(k), 403(b), and most 457 plans.

Defined Contribution Plan Limits	2025	2024	Change
Elective contributions for all eligible workers	$23,500	$23,000	+$500
Catch-up contributions for workers 50 and over	$7,500	$7,500	no change
Defined contribution maximum from all sources for workers under 50	$70,000	$69,000	+$1,000
Defined contribution maximum from all sources for workers 50 and over	$77,500	$76,500	+$1000
Employee compensation limit for calculating contributions	$350,000	$345,000	+$5,000
Key employees’ compensation threshold for nondiscrimination test testing	$230,000	$220,000	+$10,000
Highly compensated employees’ threshold for nondiscrimination testing*	$160,000	$155,000	+$5,000

* For the 2025 plan year, an employee who earned more than $155,000 in 2024 is an HCE. For the 2026 plan year, an employee who earns more than $160,000 in 2025 is an HCE.

Solo 401k Contribution Limits for 2025 and 2024

1. Elective deferrals known as Employee Contributions

	2025	2024
Maximum elective deferral	$23,500	$23,000
Catch-up contribution for age 50 or older	$7,500	$7,500

2. Profit sharing also known as Employer Contribution

	2025	2024
Maximum employer contribution	$47,000	$46,000
Catch-up contribution for age 50 or older	$7,500	$7,500

Important note: For 2025, if the business owner decides to take the full $23,000 for the elective deferral, then he/she is limited to making only $46,500 in profit-sharing contributions, thus ensuring the contribution does not exceed $69,000.

Roth 401(k) Contribution Limits

The limits for Roth 401(k) plans are the same as traditional 401(k) plans. If you have access to both types, you can split your contributions however you like. Just make sure the total doesn’t go over the yearly limit.

After-Tax 401(k) Contribution Limits

If you’ve already maxed out your regular 401(k) contributions but your employer hasn’t reached the full combined limit, you might be able to make after-tax contributions. This depends on how your employer’s plan is set up. After-tax contributions won’t lower your taxable income for the year, but they can still grow tax-deferred, giving you another way to build your retirement savings.

401(k) Deadlines for 2025

If you’re planning to contribute to your 401(k) in 2025, it’s important to stay on top of the deadlines. For most people, the last day to make contributions is December 31, 2025. This also includes those who are 50 or older and want to add catch-up contributions. If your plan allows it, you can contribute an extra $8,000 by the end of the year.

If you’re self-employed and have a solo 401(k), the deadlines might look a little different. It depends on your business setup and whether you’re contributing as an employee or through profit-sharing. Some plans also give you extra time, letting you contribute up to the tax deadline in 2026. It’s best to check in with your financial advisor or plan provider to get the exact dates for your setup.

Contribution Deadlines for Employers

For employers, the rules are a bit more flexible. In most cases, the contributions must be taken from employee paychecks during the year. But employers can make their contributions up until the tax filing deadline. For the 2025 tax year, that gives them until April 15, 2026. This extra time helps if they plan to make one-time deposits or profit-sharing contributions.

Why Contributing to a 401(k) Matters

Here’s why contributing to 401(k) is important

1. Tax SavingsWhen you contribute to a traditional 401(k), that money goes in before taxes. This lowers your taxable income for the year, which might even place you in a lower tax bracket. You won’t pay taxes on that money until you withdraw it in retirement.
2. Peace of Mind in RetirementNobody wants to spend their retirement worrying about bills. Regularly saving in a 401(k) helps build a steady source of income so you can enjoy your later years with less stress.
3. Employer MatchingOne of the biggest perks of a 401(k) is the employer match. This is extra money added to your account based on what you contribute. For example, many employers will match 100% of your contributions up to 3% of your salary, then 50% of the next 2%. That’s free money helping you grow your savings faster.

Tips to Make the Most of Your 401(k) Contributions

1. Check Your Contribution Limits Every YearMake it a habit to look at your 401(k) contribution limits once a year. This helps you stay on track with your retirement goals. If you get a raise or bonus during the year, that’s also a good moment to consider increasing how much you’re saving.
2. Use Catch-Up Contributions If You’re Over 50If you’re 50 or older, you can put in extra money to boost your savings. Right now, the catch-up limit is $7,500 a year. Starting in 2025, if you’re between 60 and 63, you’ll be allowed to put in up to $11,250 during those years. It’s a great way to give your retirement fund a final push.
3. Set Up Automatic ContributionsThe easiest way to stick to your savings plan is to automate it. Most 401(k) plans let you set up automatic withdrawals from your paycheck. This way, your money goes straight into your retirement account before you even see it, helping you stay consistent without extra effort.

FAQs

What’s the difference between a traditional 401(k) and a Roth 401(k)?

A traditional 401(k) lets you contribute money before taxes are taken out, which lowers your taxable income right now. But when you retire and start taking money out, you’ll have to pay taxes on those withdrawals. A Roth 401(k) works the other way. You put in money after taxes, but when you retire, you can withdraw it tax-free if certain conditions are met.

What if I contribute more than the allowed limit?

If you go over the contribution limit, you’ll need to fix it as soon as possible to avoid any penalties. The best thing to do is contact your plan administrator right away. They can guide you on how to correct the extra amount.

What’s the deadline to make 401(k) contributions for the 2025 tax year?

For employee contributions, the last day to contribute for the 2025 tax year is December 31, 2025. If your employer is making contributions, they may follow a different deadline depending on your plan’s rules.

Are there any income limits that stop me from contributing to a 401(k)?

In most cases, your income won’t stop you from contributing to a 401(k). But there are some limits when it comes to how much of your pay can count toward employer matching. For example, in 2024 the compensation cap was $345,000. In 2025, it has gone up to $350,000.