How Much can My Employer Contribute to my 401K?




401K Employer Maximum Contributions

I’d like to clear up a very common 401K misconception surrounding maximum contribution limits.

Question: The IRS maximum 401K contribution limit for 2016 is $18,000. But what exactly does this mean? Does this mean that if my employer matches my contribution dollar-for-dollar that I can only contribute half of the maximum (i.e. $9,000 in 2016)?

Answer: No. The IRS maximum 401K contribution is how much you can personally contribute to your 401K during the year. Your employer’s 401K contribution limit is entirely up to them – but the max on total contributions (employee plus employer) to your 401K in 2016 is $53,000 (or 100% of your salary, whichever is less). Technically, this means that your employer could contribute up to $35,000, if they wanted to, and it would not count against your personal contribution maximum.

employer 401k contribution limitsEmployer 401K Maximum Limit Discussion:

  • What is your employer’s match?
  • Did you think that your maximum contribution was your personal plus your employer’s?
  • Are you going to max your 401K contributions this year?

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