![]() For example, even if you turn 50 on December 31, 2024, you can take advantage of the catch-up contribution limit during 2024. You can use catch-up contributions if you turn 50 at any time during the calendar year. When also considering employer matching contributions, that means these catch-up contributions increase the overall maximum to $76,500. In total, qualifying adults can save up to $30,500 per year. However, if you are 50 or older, different limits apply.Īdults 50 and older can contribute an additional $7,500 to their 401(k) plans in 2024. The limit for overall contributions-including the employer match-is 100% of your compensation or $69,000, whichever is less. 401(k) Contribution Limits for 2024įor 2024, the maximum you can contribute from your paycheck to a 401(k) is $23,000. ![]() Some employers also match your 401(k) contributions up to a percentage of your salary.īecause of the tax advantages 401(k) plans provide, the government does limit how much you can contribute to your plan through elective salary deferrals-which are contributions from your paycheck-and employer matching contributions. That means a portion of your paycheck is contributed before taxes are taken out, reducing your taxable income.Ĭontributions to a 401(k) plan and the earnings on your investments are tax-deferred, so you only pay income taxes when you take withdrawals in retirement. It allows employees to contribute a portion of their pre-tax salary. To incentivize adults nearing their retirement age to save additional money, the government allows those 50 and older to contribute a higher amount to their 401(k) plans through “catch-up contributions.” Taking advantage of 401(k) catch-up contributions will allow you to save thousands more for retirement each year.Ī 401(k) plan is an employer-sponsored retirement plan with valuable tax benefits.
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