Traditional 401k contribution limits for employees in 2015 are $18,000 for those under age 50 and $24,000 for everyone else. There are separate limits for 2014 and for how much employers can contribute. We explain below.
- Traditional IRA Contribution Limits
- Roth IRA Contribution Limits
- SIMPLE IRA Contribution Limits
- SEP IRA Contribution Limits
- Traditional 401k Contribution Limits
- Roth 401k Contribution Limits
- One-Participant 401k Contribution Limits
- Coverdell ESA Contribution Limits
- HSA Contribution Limits
Traditional 401k Contribution Limits
The table below shows traditional 401k contribution limits for 2014 and 2015.
The table above shows two kinds of 401k contribution limits.
The first kind of traditional 401k contribution limits are limits to the amounts employees can contribute to a 401k. For 2014 these limits are $17,500 for those under age 50. Employees over age 50 can contribute $23,000 to their 401ks in 2014 because of catch-up contributions. Catch up contributions were enacted by congress because of concerns that baby boomers weren’t saving enough.
The second kind of traditional 401k contribution limits are the overall limits on combined employees and employer contributions. For 2014 overall 401k contribution limits are set at $52,000 for those under age 50 and $57,500 for those over age 50. For 2015 overall 401k contribution limits are $53,000 for those under age 50 and $59,000 for those over age 50.
Traditional 401ks Explained
Traditional 401k plans are a way for employees to save money for retirement without paying taxes on it first. Contributions to traditional 401ks come out of employee paychecks and go straight into savings accounts before taxes. While contributions to traditional 401k plans aren’t taxed, withdrawals during retirement are.
- Taxpayers age 50 or older don’t need to be “behind” in their 401k contributions to make “catch up” contributions.
- Overall 401k contributions can’t exceed the employee’s compensation. For example if a man earns $20,000 per year, that’s the most that can be put into his 401k account annually.
- Retirement Topics – 401k and Profit-Sharing Plan Contribution Limits – IRS.gov
- IRS Announces 2015 Pension Plan Limitations; Taxpayers May Contribute up to $18,000 to their 401k plans in 2015 – IRS.gov