How to Figure Your 401k Maximum Contribution

Your annual 401k maximum contribution can vary greatly, depending on many different factors. It is important that you understand what your contribution limit is so that you do not exceed it in a given year. Here are a few things about how to figure your 401k maximum contribution limit.

Age

Your age is going to play a factor in how much money you can contribute to your 401k. If there are no other factors involved, you will be able to contribute up to $16,500 per year, if you are under the age of 50. If you are 50 years old, you connect to contribute a maximum of $20,000 per year to your retirement account.

Income

Your income is also going to play a role in how much money you can contribute to your 401k. If you make less than $110,000, you will be able to make a full contribution. However, if you make more than $110,000, you may not be able to contribute as much. If you fit into this category, you need to check with your employer to see how much money you will be able to contribute for the year based on the total contributions to the plan. 

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