401(k) Overview

Contribution Limits

Future retirees cannot make unlimited contributions to their retirement account, unfortunately. In 2018, the contribution limit for those under the age of fifty is 18,500 dollars. This number is reevaluated each year and can either rise or stay the same based on the economic climate of the country. For those still in the workforce after the age of fifty, they can contribute up to 24,500 dollars annually to their 401(k). This is designed to help them 'catch up' on retirement savings when they are only fifteen years or so away from retirement. If you account for an employer match, the maximum possible contribution to a 401(k) is 55,000 dollars as an employer can contribute up to 36,500 dollars as part of a matching program.

Continue reading to learn about the relationship between 401(k) plans and taxes.