IRS contribution limits

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7 years ago

The IRS establishes contribution limits for qualified retirement accounts, such as 401(k) plans, 403(b) plans, IRA accounts, SEP IRA accounts and others. The IRS increases these limits periodically, often but not always annually.

For current IRS contribution and compensation limits and other information, see the IRS website, including for the following:

  • The 402(g) limit applies to employee elective deferrals into 401(k) plans, 403(b) plans and governmental 457(b) plans. Note: You can increase/change your contribution levels at any time during the year.
  • Catch-up contributions permitted in 401(k) plans, 403(b) plans, and governmental 457(b) plans, for people who turn age 50 during that year, and a higher catch-up contribution (resulting from the SECURE 2.0 Act) is allowed for those turning age 60-63 during the year. Some plans allow participants to front-load your catch-up contribution, i.e. earlier in the year. Also, the SECURE 2.0 Act requires that plan participants with income over a certain level make their catch-up contributions on a Roth basis.
  • Another type of catchup contribution that can be written into a 403(b) plan designs, for people with at least 15 years of service, which allow this additional contribution on top of the regular catchup contribution (this is subject to a lifetime limit rather than an annual limit).
  • The “415 limit,” which is the combined employee and employer contribution maximum, within and across qualified retirement accounts. Note: A 401(k) plan is a subset of a 401(a) plan, and all defined contribution plans are 401(a) plans and are subject to this overall Section 415(c)(1)(A) limit (excluding catch-up contributions).
  • IRA contribution limit (plus catch-up contribution, if applicable, for those who turn age 50 or older during the year). IRA contribution limits vary depending on a number of variables.
  • SEP IRA, Solo 401k and other qualified retirement account types.

This article is for informational and educational purposes. Any hyperlinks to third party websites are not endorsements and outside content is believed to be reliable but has not been independently verified. Consult an objective financial advisor for guidance as appropriate.