Episode 58: What Are The Contribution Limits for 401(k)s?

Published: November 28, 2021 | Updated on: December 8, 2021

Today’s question is, what are the contribution limits for 401(k)s?

So I’ll refer to them as 401(k)s, but there are other available plans at work such as a 403(b) and 457. For the most part, people are saving money into these plans on a pretax basis.

For Example:

You make $80,000 a year and you put $10,000 of that into your 401(k). Instead of paying taxes that year on $80,000 of income, you pay taxes on $70,000 of income and that 10,000 grows for retirement, at which point you take out and pay taxes on it then. Sometimes that’s more, and sometimes that’s less, but that’s a conversation for another day.

Contribution Limits By Year
  • 2021: your contribution limit is $19,500. If you are over the age of 50, you can make a catch-up contribution of $6,500 for a total contribution amount of $26,000.
  • 2022: limit will increase by 1,000, so you can put in $21,500, no matter your age. If you’re over the age of 50, you can make an additional catch up contribution of $6,500 and that’ll get you to $27,000.
The Importance of Matching

You want to make sure that you’re saving in a vehicle at work. If you’re getting matched, make sure you’re contributing at least enough money to get that match. A lot of employers will deposit money into your 401(k) even if you don’t, but you do have to open up the 401(k) to take advantage of that. This is important because what they’re matching is free money and will be the funds that you’re going to live off of in retirement. You can get into the conversation about whether you should be putting money into a traditional 401(k) pretax or a Roth 401(k) after tax so that when you take that money out, you don’t have to pay taxes on any of it.


You want a balance and options so that it’s not all pre-tax. You have to be having these conversations now, not just about how much you should save, but are you saving the right way? And once you do save, was that money working for you in the 401(k) as hard as you were working for it? 401(k)s are a very important vehicle, a great thing to be saving money into, but have these conversations to make sure that it’s adding value. Look at the entirety of your plan is because that’s a key piece of it.


Thanks for joining me and I hope you found this information helpful!

P.S. If you enjoyed this topic and want to learn more, download your copy of our book “The Ultimate 401(k) Guide”.

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