[Xeng]

When planning for retirement and optimizing contributions to a 401(k) plan, understanding the nuances of contribution limits becomes crucial. A common point of query is whether the employer’s match counts towards the annual maximum contribution limit set by the IRS. Given the implications this has on retirement savings strategies, it’s vital to have a clear understanding of these rules.

For financial experts, those familiar with 401(k) regulations, or individuals who’ve navigated this scenario: Can you clarify if an employer’s matching contribution to a 401(k) counts toward the individual’s annual maximum contribution limit as set by the IRS? Insights on this matter would greatly aid in ensuring compliance and maximizing retirement savings potential.

[David]

Well, the real total limit is like $66,000 / year so in that sense yes. But as far as the limit most often referred to of $22,500, no.

The $22,500 is your contribution limit as an employee.

[Mike]

No, but I was surprised to hear that a match does count on an HSA.

[Ran]

It counts to the overall plan limit (your contributions, employer matching contributions and other misc contributions your employer makes) which is $66000 total but not your personal contribution limit which is $22500. Note: These limits are for people under 50.

If you are 50 and over you have 6K more of room over the contributions limits I mentioned above.

Don’t miss: It’s my first time with a 401K

[Thong]

No. You can put $22500 from your paycheck plus whatever your company matches.

If you have extra cash to invest. Put that in Roth Ira and 529 plan if you have kids

[David]

No. But if your contributions go to a Roth 401k your employer match still goes to a Traditional 401k account.

[Author]

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