401(k) Contribution Limits for 2024 and 2025
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The 401(k) plan is a fundamental retirement planning tool for many Americans.
The money you invest grows tax-free as long as it remains in the account, and contributions made to a traditional 401(k) can also reduce your taxable income, which can lower your tax bill.
Contributing enough to hit your employer match is a great way to start investing with a 401(k), but that doesn't mean you can't contribute more if you're able to.
However, be mindful of the annual limit. The IRS sets yearly maximums based on the pace of inflation, and exceeding them can result in penalties if not addressed.
Learn more about the maximums, plus how the new catch-up contributions for those ages 60 to 63 will work in 2025.
401(k) contribution limits 2024
In 2024, the maximum 401(k) contribution limit is $23,000 for people under the age of 50. People who are 50 and older can add an extra $7,500 as a catch-up contribution, for a total of $30,500.
The combined limit for employee and employer contributions is $69,000 for those below the age of 50 and $76,500 for those 50 and older.
For most people, the last day to contribute to a 401(k) for 2024 is December 31.
2024 401(k) contribution limit | Catch-up contribution limit | Maximum employee contribution | Total maximum 401(k) contribution | |
|---|---|---|---|---|
Under the age of 50 | $23,000. | Not eligible. | $46,000. | $69,000.* |
Age 50 and older | $23,000. | $7,500. | $46,000. | $76,500.* |
*or 100% of employee compensation, whichever is less. | ||||
401(k) contribution limits 2025
In 2025, the 401(k) contribution limit will rise to $23,500, with a combined limit of $70,000 for employee and employer contributions.
Catch-up contributions will remain capped at $7,500 for those 50 and older. However, thanks to the Secure 2.0 Act, people ages 60, 61, 62 and 63 will be able to make larger catch-up contributions of up to $11,250.
2025 401(k) contribution limit | Catch-up contribution limit | Maximum employee contribution | Total maximum 401(k) contribution | |
|---|---|---|---|---|
Under the age of 50 | $23,500. | Not eligible. | $46,500. | $70,000.* |
Ages 50 to 59 | $23,500. | $7,500. | $46,500. | $77,500.* |
Ages 60 to 63 | $23,500. | $11,250. | $46,500. | $81,250.* |
Age 64 and older | $23,500. | $7,500. | $46,500. | $77,500.* |
*or 100% of employee compensation, whichever is less. | ||||
Roth 401(k) contribution limits
The contribution limits for a Roth 401(k) plan are the same as with a traditional 401(k). If you have access to both accounts, you can contribute to each one as long as your cumulative contributions don't exceed the maximum 401(k) contribution limit.
» MORE: Compare Roth 401(k)s vs. traditional 401(k)s
After-tax 401(k) contribution limits
If you've maxed out your 401(k) contribution for the year as an individual, but your employer's contributions haven't met the combined limit, you may be able to make an after-tax 401(k) contribution (depending on your employer's plan provider).
After-tax contributions to a 401(k) plan refer to additional contributions employees can make after reaching their pre-tax or Roth contribution limits. Unlike pre-tax contributions, after-tax contributions do not reduce your taxable income in the year they are made, but they can still grow tax-deferred.
Additionally, they can be part of a mega backdoor Roth conversion, where these after-tax contributions are rolled into a Roth IRA, allowing future earnings to grow tax-free and providing tax-free withdrawals in retirement
» Learn more: A deep dive into after-tax 401(k) contributions
401(k) max contribution limits for highly compensated employees
People who earn a high salary may be classified as highly compensated employees (HCEs) by the IRS. An employee is considered an HCE if they pass one of the tests below:
Ownership test. A person who owns more than 5% of the company, regardless of compensation.
Compensation test. A person who was in the company's top 20% of pay and received over a set number in compensation. For 2024, that number is $155,000. In 2025, it will increase to $160,000.
To ensure that HCEs don't benefit disproportionately to non-HCEs, the IRS requires nondiscrimination testing for all 401(k) plans. The two key tests are the Actual Deferral Percentage (ADP) test, which compares salary deferral rates between the two groups, and the Actual Contribution Percentage (ACP) test, which focuses on employer matching and after-tax contributions.
If the test determines that people across compensation levels aren't participating in a manner the IRS deems proportionate, employee contribution levels for HCEs can be lowered. In these cases, your employer may need to return some of your excess contributions.
What happens if I exceed my 401(k) limit by mistake?
If you contribute too much to your 401(k) and notice your mistake before the tax filing deadline, you can probably correct it with your employer. You’ll need to notify your plan administrator. If your plan allows excess deferral distributions, the plan administrator will return the money and any earnings to you and file a 1099-R for the year the excess contribution was distributed.
If you don’t catch the mistake before the deadline, you may have to pay taxes twice on the amount you contributed over the limit. That’s because 1) the excess contribution is taxable in the year it was made and 2) the IRS will still count that money as taxable in the year it’s distributed. Any earnings are also taxable in the year they are distributed, the agency says.
» Looking to cash out? Learn the 401(k) withdrawal rules
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