What is the 401(k) & IRA contribution limit?

Both the 401 (k) plan and an IRA have annual contribution limits set by the IRS. In 2024, the 401 (k) contribution limit for employees under 50 is $23,000, while those 50 and older can add an extra $7,500 as a catch-up contribution. For the IRA, the 2024 contribution limit is $7,000, with an extra $1,000 for those 50 and older.

What is the 401(k) & 403(b) contribution limit?

The contribution limit for employees who participate in 401 (k), 403 (b), and most 457 plans, as well as the federal government's Thrift Savings Plan is increased to $23,000, up from $22,500. The limit on annual contributions to an IRA increased to $7,000, up from $6,500.

Should I Max out my 401(k) and IRA contributions?

If you cannot invest the full amount possible, it is strategically shrewd to max out your investments into your 401 (k) to earn the full employer match. Any remaining funds should be channeled to your IRA. 401 (k) and IRA contribution limits are based on your age, income, and if you (or your spouse) have a plan at work.