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401(k) Contribution Limits 2023

  • Post author:Bob Haegele
  • Post last modified:May 31, 2023

401(k) contribution limits are always changing. This is also true for other types of retirement and investment accounts. So, what are the 401(k) contribution limits for 2019?

And are contribution limits the same for Roth 401(k)? Let’s take a look.

401(k) Contribution Limits 2023

Per the IRS, 401(k) contribution limits for 2023 are $22,500. This is up from $20,500 in 2022.

$22,500 may sound like a lot of money – and it is. But employer plans such as the 401(k) have some of the best advantages of any retirement or investment account.

401(k) Employer Contributions 2023

There is not a limit to the 401(k) employer contribution limit for 2023. Your employer may contribute as much as they like. The only limit is that total contributions cannot exceed $66,000.

Make sure you take advantage of 401(k) max contribution to maximize your retirement savings. This is free money and not something you should ignore.

Solo 401(k) Contribution Limits 2023

Most entrepreneurs have a 401(k) but not a solo 401(k).

 

Despite the differences in who has a solo 401(k), there aren’t many other differences. Just like a “regular” 401(k), the solo 401(k) limit for 2023 is $66,000.

When leveraging a solo 401(k), you will probably need to link in your checking account using your routing number. Learn more about routing numbers here:

Can You Contribute to a 401(k) and an IRA?

In a word: yes, you absolutely can. IRAs have their own limit ($6,500 in 2023).

That said, there is no reason you can’t contribute to both. In general, the best bet is contribute up to your employer match (if you get one).

After that, it will depend on the 401(k) options you have available. IRAs often offer more freedom in terms of which funds you have available. I usually go for the most broadly diversified funds with the lowest fees.

401(k) Contribution Limits 2023 Over 50

For those aged 50 and over, the catch-up contribution limit in 2023 is now $7,500.

If you aren’t familiar with catch-up contributions, they allow those 50 and over to contribute additional money to their 401(k). Thus, those aged 50 and over can have a total contribution limit of $30,000 in 2023.

Again, there is no reason not to take full advantage of this additional limit for those nearing retirement. Saving more is always better, especially works in their “catch-up” years are nearing age 59 & 1/2, when they can start taking distributions.

Also, there are no other requirements one must meet in order to make catch-up contributions. However, your employer must allow them.

If you are over 50 and your employer allows them, you are eligible to make catch-up 401(k) contributions.

Roth 401(k) Limits: Is There a Difference?

Many workers opt to invest in a Roth 401(k) because this type of account will allow you to withdraw money tax-free in retirement. If you are one of them, you may be wondering whether Roth 401(k) limits are the same as the traditional 401(k).

While things may often seem complicated when it comes to retirement accounts, this one is fairly straightforward.

That’s because Roth 401(k) limits are also $22,500 in 2023.

In reality, there are not a huge number of differences between Roth 401(k) vs traditional other than how they are taxed.

Keys to 401(k) Investing

There are four main strategies you should always leverage when it comes to your retirement:

  1. Maximize employer matching
  2. Maximize pre-tax contributions
  3. Minimize total taxes paid
  4. Invest for the long haul

These are our main goals. The last one will not necessarily be impacted by how you structure your savings, but the others almost certainly will.

401k contribution limits 2019 - be sure you are on track with your 401k or Roth 401k.

 

Be sure your 401(k) is tax-optimized.

It should also be noted that you might not be able to achieve all of these at the same time. I know I’m not. For example, I am not even coming close to maxing out my pre-tax contributions. But more on that later.

Nevertheless, the closer you can get to achieving all of these goals, the safer and more secure your future will be.

Other Considerations

There are also other considerations, such as the amount of the match (if you get one), the funds offered by your employer, whether the funds are “mobile,” and so on.

This mobility idea is actually a very important consideration. You know that phrase “You don’t know what you don’t know?” That could not have been truer for me. With my previous employer, the money they matched on my retirement plan had a time requirement before I was fully vested.

Because I wasn’t fully vested, I lost the entirety of the money. Obviously, I didn’t do this on purpose, but because of that mistake, I lost over $4,000. While it may be difficult or impossible to avoid this scenario, it’s good to at least be aware of the possibility. I wasn’t.

Bottom line: because there are so many variables, you’ll want to meet with someone in HR to discuss all of the options offered by your employer.

401(k) Contribution Limits 2023 in Summary

Remember that for 2023, 401(k) contribution limits are $22,500.

This also applies if you have other types of plans such as a 403(b) and most 457 plans. These plans also have a $22,500 limit for 2023.

The catch-up 401(k) contribution has increased to $7,500. This applies only to workers aged 50 and over.

Be sure to take advantage of your 401(k) and all the retirement accounts at your disposal. After all, these are some of the most beneficial retirement accounts.

Related:

Hey there. My name is Bob Haegele and I'm a personal finance writer who has been freelancing since 2018. Since then, I've built a six-figure career as a freelance writer. My work has been featured in Business Insider, Forbes Advisor, TIME.com, USA Today, and many other outlets. Interested in starting a blog of your own? Check out my post on starting a blog.

This Post Has 6 Comments

  1. Daisy

    Another great read. Thank you for this. I certainly have not paid much attention to my retirement options, being a stay at home mom for 16 years. I am interested in looking for a job in the upcoming months to get some extra income in. It would be nice to finally be debt free and be able to travel on the side.

    1. Bob

      I’m glad you enjoyed it. For sure – retirement plans are a powerful vehicle.

      Any particular travel destinations in mind? 🙂

  2. We got some really bad advice and pulled money out of my husband’s 401k and paid for a house in full. So, no mortgage. BUT…when we withdrew the funds they took out taxes…that part we knew. What we were given the wrong answer to was the IRS penalty!

    So, my husband will retire in 5-6 years. House is paid for which is a good thing but we owe the IRS. UGH!

    1. Bob

      Ugh, sorry to hear about that. Tax law can be seriously complicated. I’m still learning about it, for sure.

  3. Johnzelle

    Great post! I have a job that offers matching so I just started my first ever 401k. I am only contributing up to the matching percentage since I’m paying off debt

    1. Bob Haegele

      Yeah, that certainly makes sense. Gotta get that free money though!

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