Many employers offer what are commonly referred to as 401(k) plans, named after the tax code section that created the plans. These plans allow employees to defer part of their earnings for retirement. Some employers offer matching contributions that increase the attractiveness of the programs.
The value of 401(k) plans is enhanced even further by increasing the general contribution limit and allowing individuals over age 50 to make additional contributions. Where an employer’s plan permits, individuals can contribute amounts that are not excluded from income to a 401(k) plan in a manner similar to Roth IRA contributions.
Catch-up contributions are exempt from the regular dollar limits on deferrals provided that all 401(k) plan participants are permitted to make catch-up contributions. The table below summarizes the inflation adjusted limits for 401(k) plans for 2015 through 2022. If you have additional questions about participating in your employer’s 401(k) plan, please call this office.
401(k) Contribution Limits
| Year | 2015-17 | 2018 | 2019 | 2020-21 | 2022 |
|---|---|---|---|---|---|
| Under Age 50 | 18,000 | 18,500 | 19,000 | 19,500 | 20,500 |
| Age 50 & Over | 24,000 | 24,500 | 25,000 | 26,000 | 27,000 |
