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What Are the 401(k) Contribution Limits for 2024? All You Need to Know

401k contribution limits
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updated: March 26, 2024

If you participate in a 401(k) retirement savings plan at work, your personal contribution limit in 2024 is $23,000. But if you are age 50 or older, you can take advantage of an additional catch-up contribution of $7,500 for a total of $30,500. These limits also apply to 403(b), most 457 retirement plans, and the federal government’s Thrift Savings Plan.

The Internal Revenue Service (IRS) sets an annual limit on the amount of your personal contributions, also known as your salary deferral, for your retirement plan savings. The limits for 2024 are higher than those for 2023 ($22,500) because the IRS adjusts them for inflation and cost of living increases every year. The IRS also imposes compensation limits to control the amount that employers can contribute and to describe certain classes of highly compensated employees.

These plans can be more complicated than they seem. Read on to learn the fine points.

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401(k) contribution limits for 2024

The 2023 personal contribution limit has one level for employees under 50 and another for workers 50 and older. The IRS imposes maximum contribution limits to help ensure all employees' fair participation in 401(k) plans.

Deferred compensation limits for all employees under age 50. For 2024 you may contribute up to $23,000 to your employer's 401(k) plan.

Deferred compensation limits for workers ages 50 and older. You can contribute an additional $7,500 for a total of $30,500.

Note: Contributions to a traditional IRA ($7,000, or $8,000 for those age 50 or older in 2024) do not count toward the limits above. The same applies to 457(b) plan deferrals of $23,000 ($30,500 if you’re 50 or older) in 2024.

Maximum total contribution for employees under 50. Total maximum contributions to your 401(k) plan can be at most $69,000 if you are under 50, including salary deferrals, Roth 401(k) contributions, employer contributions, and personal non-tax-deductible (not Roth) contributions if allowed by your plan.

Maximum total contribution for employees 50 and older. If you are 50 or older the maximum total is $76,500 including up to $7,500 in catch-up contributions.

Example: Let’s say you had a 401(k) at one employer, quit that job and took out another 401(k) at a second employer in 2024. The $23,000 personal limit would apply to all of your contributions made to both plans in 2023. Likewise, the $69,000 ($76,500) limit would apply to total contributions made to all 401(k), 403(b), and most 457 plans this year.

401(k) compensation limits for 2024

The IRS also sets annual compensation limits in order to ensure the fair participation of all employees who participate in 401(k) plans. Here is what you need to know for 2023.

Employee compensation limit. For 2024, your employer can only consider up to $345,000 in compensation to calculate any contribution it makes to your 401(k) plan, whether through 401(k) matching or by direct contribution.

Highly compensated employees (HCEs). If you own 5% or more of the company that employs you or receive compensation of $155,000 or more in 2024, you are classified as a highly compensated employee (HCE) and are subject to non-discrimination tests to ensure you do not enjoy a tax-saving advantage over non-HCEs.

Key employees. If you are a 5% owner, a 1% owner who receives over $155,000 in compensation, or an officer who receives compensation of over $220,000, you are classified as a key employee and also subject to nondiscrimination tests.

Note: Key employees can also be HCEs, depending on ownership and/or salary.

The following table recaps contribution and compensation limits along with definitions of certain employee classes for 2024.

IRS Limits & Employee Definitions 401(k), 403(b), 457 plans2024
Deferred contribution limits for all employees under 50
$23,000
Deferred contribution limits for employees 50* or older
$30,500
Maximum all sources contribution limits for employees under 50
$69,000
Maximum all sources contribution limits for employees 50* or older
$76,500
Employee compensation limit (for calculating employer contribution amounts)
$345,000
Definition of a highly compensated employee (HCE)
5% ownership; or over $155,000 salary
Definition of a key employee (officer or owner)
5% ownership; or 1% ownership and over $155,000 salary; or over $220,000 salary

*The age 50+ catch-up and “all sources” amounts apply to anyone who turns 50 anytime during the tax year.

Roth 401(k) contribution limits

Your personal contribution limit includes after-tax contributions to a designated Roth 401(k) account. Unlike a Roth IRA, designated-Roth contributions within a 401(k) are not subject to an income threshold. But, as with a Roth IRA, qualified withdrawals (including both contributions and earnings) are not taxed.

Employer contributions

Employers must calculate their contributions based on compensation of $345,000 or less and are subject to a limit of $69,000 ($76,500 if you are 50 or older) minus your contributions. If you have any allocated forfeitures or nondeductible contributions, they must also be subtracted from the maximum total.

401(k) contribution limits when you have multiple 401(k) plans at different employers

Your annual personal contribution limit for 2024 of $23,000 or $30,500 applies to all 401(k) accounts. If you contributed to three 401(k) accounts in 2024, the total of those contributions can't exceed $23,000 ($30,500 if you’re 50 or older).

Limits for highly paid employees

For 2023, highly compensated employees, or HCEs, and key employees have the same personal contribution limits as non-HCEs—$23,000 or $30,500, depending on age. However, the IRS requires companies to perform three nondiscrimination tests each year to prevent HCEs or key employees from gaining more benefit from the company's 401(k) plan than non-HCEs.

  1. ADP test. If the actual deferral percentage (ADP) of HCEs is more than 2% higher than that of non-HCEs, the plan fails and must be corrected.
  2. ACP test. If the actual contribution percentage (ACP) of HCEs is more than 2% higher than that of non-HCEs, the company's 401(k) plan fails the test and must be corrected.
  3. Top-heavy test. A plan is top-heavy when, as of the last day of the prior plan year, the total value of the plan accounts of key employees is more than 60% of the total value of the plan assets.

Correction of these test failures is spelled out in your 401(k) plan rules and, in the case of ADP and ACP tests, can consist of refunding excess contributions back to HCEs in an amount necessary to pass the tests. These refunds will be subject to taxation and are no longer a part of the HCE’s 401(k) plan. To prevent the need for correction, some companies conduct mid-year ADP/ACP test projections to allow HCEs to adjust their contributions.

When a plan fails the top-heavy test, the employer has to contribute up to 3% of salary for all non-key employees as of the last day of the plan year. This contribution is subject to a vesting schedule that requires participants to be 100% vested after three years.

Contributions in excess of annual limits

In 2024, if your personal contributions, including Roth contributions, to your 401(k) plan are more than $23,000 (or $30,500 if you are 50 or older), your employer must initiate corrective action to return those contributions to you by April 15, 2025. Further, any earnings on those contributions must also be returned. You will need to include the excess contributions in your gross income and pay taxes on that amount, as well as on the earnings, on your 2024 tax year return. Excess Roth contributions are not subject to taxation, but earnings are.

If you fail to obtain your excess contributions and earnings by April 15, you will be subject to double taxation—once on your 2024 return and again on your 2025 return. Excess Roth contributions will have to be returned just like pre-tax contributions, but will only be taxed in the year distributed.

After-tax 401(k) contribution limits

Roth 401(k) contribution limits are part of the $23,000 ($30,500) regular personal contribution limit for 2024, if your 401(k) plan allows Roth contributions. If your plan allows after tax (non-Roth) contributions, they are not subject to the $23,000 ($30,500) personal limit and can be made to supplement the amount of your employer contribution up to $69,000 ($76,500).

Early withdrawals of after-tax 401(k) contributions still incur a 10% penalty if you’re under age 59½. And, unlike with a Roth 401(k) plan, earnings on after-tax 401(k), non-Roth contributions are taxable upon withdrawal.

How much should you contribute to your 401(k)?

First of all, if you can, you should contribute enough to your 401(k) to take advantage of the full amount of your employer match if there is one. Additionally, experts generally recommend that you contribute between 10% and 15% of your income each year. After that, it’s a matter of where you can get the most bang for your retirement-savings buck. This could include your 401(k), traditional IRAs, Roth IRAs, and even taxable investment accounts. Playbook can provide insights on how to leverage tax-advantaged accounts like these for retirement.

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How to maximize your 401(k) contributions

Here are some easy strategies you can employ to help maximize your personal 401(k) contributions.

Increase your savings rate. The default savings rate for many 401(k) plans is 3%, but you are free to set your own savings rate (within the IRS deferral limits, of course) and increase it as you are able.

Take advantage of employer matching. Many employers match your contributions up to a certain amount or a certain percentage. Find out your employer match and make sure you get every dime of this “free money.”

Don’t quit before you are vested. Your employer match likely comes with some strings attached in the form of a requirement that you have to be with the company for a certain number of years before you get to keep the employer match. Make sure you know the rules and take them into account when you plan career moves.

Take the savers tax credit. In addition to your pre-tax contributions to your 401(k) that reduce taxable income, you may qualify for an additional tax credit of $1,000 for individuals or $2,000 for couples, representing 50% of a maximum contribution of $2,000 or $4,000, respectively. To qualify for the full 50% (the credit phases out based on income), in 2024, your adjusted gross income (AGI) must be $46,000 or less if filing jointly or $23,000 or less if filing as a single person. Lower tax credits are available on a sliding scale for incomes up to $76,500 for married filing jointly and $38,250 for singles.

Add a designated-Roth 401(k). Ask whether your employer offers a Roth 401(k) or allows non-Roth after-tax contributions. Either one can help increase your savings, and non-Roth after-tax contributions are not tied to your personal ($23,000/$30,500) limit. Depending on your company’s plan, you may be able to split your contribution between the two types of 401(k)s.

Know where your 401(k) accounts are. Beagle, a company that specializes in finding lost 401(k) accounts, suggests starting by contacting former employers to find lost accounts. Check old 401(k) statements to locate the company HR department. There are “unclaimed assets” databases that might also hold clues. Of course, use your Social Security number cautiously when doing this research.

Other ways to save for retirement

When calculating retirement income, don’t forget to include Social Security benefits and any pensions for which you qualify. Then consider other avenues in addition to your workplace 401(k) that can increase your retirement portfolio amount.

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Individual retirement account (IRA). There are two main types of IRAs—traditional and Roth. Both offer tax advantages. Best of all, the 2024 IRA contribution limits ($7,000/$8,000 for those age 50 and over) are in addition to those of a 401(k).

Health savings account (HSA). One under-utilized savings plan is the HSA, which can be used to help pay healthcare expenses in retirement. HSA contributions are tax-deductible and withdrawals are tax-free if the money is used for healthcare expenses. Limits for 2024 are $4,150 for individuals, $8,300 for families, with a $1,000 catch-up amount for people age 55 or older. (Note that in order to contribute to this account you need a high deductible health plan, which may not be suitable for everyone.)

Taxable investment account. It’s always possible to invest post-tax funds after you’ve exhausted your tax-advantaged savings options. This can include a brokerage account, which offers no tax advantages or tax-free growth, but does open up many more investing opportunities than most 401(k) and IRA plans.

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Tax deferred annuities. Insurance company annuities offer tax deferral and investment options and a set payout for a number of years or even for life. There is no limit to the amount you can invest in an annuity.

Real estate. Opportunities range from real estate investment trusts (REITS) to rental housing. Real estate can provide steady retirement income, capital gains, or both.

TIME Stamp: A 401(k) with an employer match is an excellent way to save for retirement

The amount you can contribute to a 401(k) plan is controlled by the IRS. For 2024, your personal contributions cannot exceed $23,000 or $30,500 if you are age 50 or older. Other limits also apply, including the amount your employer can contribute.

What makes 401(k) plans especially attractive is that your employer can match your contributions (up to set limits). Taking advantage of this “free money” is a no-brainer for most people. If you max out your 401(k) contributions—or just the amount that can be matched—explore other options to help you reach your total savings goal.

Frequently asked questions (FAQs)

Did 401(k) limits increase in 2024?

Yes. Personal contribution limits for 401(k) plans increased in 2024 to $23,000—up $500 from $22,500 in 2023—for people under age 50. If you are 50 or older, your personal contribution limit is $30,500—the catchup contribution remains at $1,000, same as last year.

If I have a 401(k), can I receive a Saver’s Tax Credit?

Possibly. The saver's tax credit is available to income-eligible taxpayers who contribute to employer-sponsored 401(k), 403(b), and certain other retirement savings plans. In order to get the full 50% tax credit for 2024, a single tax filer must have an AGI of $23,000 or less, while joint filers must have income of $46,000 or less.

Does the 401k contribution limit include an employer match?

Your personal contribution limit does not include employer matching. There is an all-sources limit that does include all contributions you make and any employer contributions made to your 401(k) account. In 2024, the all-sources limit is $69,000 for those under age 50, and $76,500 for those age 50 and over.

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