401k Contribution Limits

The amount employees can contribute before taxes under a traditional 401k or safe harbor 401k plan is limited to $17,500 for 2013.
Traditional and safe harbor 401k plans can allow additional catch-up contributions in the amount of $5,500 for 2012 for employees aged 50 and over.

Some plans may offer you the option to contribute on an after-tax basis which is not included in the $17,500 limit.  Note some plans may restrict employee contributions to an amount less than $17,500, and may also choose not to permit catch-up contributions.

In addition to the pre-tax or tax-deferred contributions, a 401k plan may also allow employees to make after tax-contributions.  When after-tax contributions are added to the pre-tax contributions, this becomes the total 401k contribution – which also has a limit.

401k contribution limits for each year

401k contribution limits

In 2013, the total contributions to a 401k plan is $51,000 or 100% of your compensation – whichever is less.  The total 401k-contribution limit will be indexed to inflation and can move up in $1,000 increments.  You can read more about contribution limits at the irs.gov.

In addition, there are special non-discrimination rules to prevent highly compensated employees (HCE) from being able to save substantially more than lower paid employees. If you earn more than $90,000 a year, or own 5 percent or more of the company, additional contribution caps may apply for you. Employees are always 100% vested in their salary deferrals.  Employer contributions may be vested on a graduated vesting schedule.

 401k Contribution Limits by Year

Year

401(k)
Maximum

Catch-Up
Contribution

Maximum
Allocation

2013

$17,500

$5,500

$51,000

2012

$17,000

$5,500

$50,000

2011

$16,500

$5,500

$49,000

2010

$16,500

$5,500

$49,000

2009

$16,500

$5,500

$49,000

2008

$15,500

$5,000

$46,000

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