401k Contribution Limit 2018

49 Years Old or Younger

Age 50 or Older 

$18,500

$24,500

401k Contribution Limit 2017

49 Years Old or Younger

Age 50 or Older 

$18,000

$24,000

The 401k contribution limit is indexed for inflation. It changes from year to year, so bookmark this page to keep up-to-date on any changes.

Contribute up to the 401k contribution limit via payroll deductions

You must contribute to your 401(k) via payroll deductions during the calendar year. You cannot contribute money directly to the plan, nor contribute to it after the end of the year.

Above are the maximum limits; don't think you have to contribution the full amount. Via your 401(k) contribution percentage, be sure and contribute as much as you can afford. Few accounts offer you the tax advantages of a 401(k). Make it your principal vehicle for saving for retirement.

These limits apply whether you make all pre-tax (traditional contributions), all Roth contributions, or a combination of the two. In other words, your limits are not $18,500 each for pre-tax and Roth contributions: Your total 401(k)-type contributionsno matter what flavor or flavorscannot exceed the maximum for the plan year.

When's Your Birthday?

Even if you turn 50 on December 31st, you still qualify to make "catch-up" contributions to your 401(k). This extra $6,000 is made via a separate contribution declaration and allows employees turning age 50 or older in 2018 to contribute up to the $24,500 maximum.

Only use the $6,000 catch-up provision if you want to save over the $18,500 limit. If your company offers a match, most only match contributions made via this $18,500 limit. Besides complicating things, invoking the catch-up contribution in addition to your regular contribution percentage could curtail your company match if you're saving less than $18,500 via the regular contribution percentage.

High Wage Earners and 401(k)s

If you're a higher wage earner, there are no income limits that apply to 401(k)s. However, only an employee's first $275,000 of income can be used for 401k contribution purposes in 2018.

There is a chance that your 401k contribution limit could be less. If your company flunked the ADP/ACP tests that are required by federal law, that means your plan is considered "top heavy."

You'll know if your company's plan is top heavy and if you're affected for the coming plan year. They'll contact you and label you as a highly compensated employee, which could limit the amount you can contribute.

If your company's plan is not top heavy or your company's plan is top heavy but you're not designated a highly compensated employee (earnings of $120,000 and over for 2018), you can still contribute the maximum.

Max out those 401(k) contributions

49 Years Old or Younger

 $18,500

Age 50 or Older

 $24,500

Try and max out that 401(k) contribution limit every year. Because of the tax advantages and your company's fiduciary duty, a 401(k) is one of the best places you can put your money.