Employer-based retirement plans like the 401(k), 403(b), and Thrift Savings Plan are not perfect, but they are often the best available option to save money in a tax-advantaged manner. For 2019, the employee elective deferral (contribution) limit for these plans increased to $19,000 (it is indexed to inflation). The additional catch-up contribution allowed for those age 50+ stays at $6,000 (for a total of $25,000).
Here’s a historical chart of contribution limits for the last 11 years (2009-2019).
|Year||401k/403b Elective Deferral Limit||Additional Catch-Up Allowed (Age 50+)|
The limits are the same for both Roth and “Traditional” pre-tax 401k plans, although the effective after-tax amounts can be quite different. Employer match contributions do not count towards the elective deferral limit. Curiously, some employer plans set their own limit on contributions. A former employer of mine had a 20% deferral limit, so if your income was $50,000 the most you could put away was $10,000 a year.
For 2019, the maximum contribution limit when you include both employer and employee contributions is $56,000, an increase of $1,000. The employer portion includes company match and profit-sharing contributions.
The employee salary deferral max limit applies even if you participate in multiple 401k plans.
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