For 2025, the 401(k) employee contribution limit is $23,500. If you are 50 or older, you can make an additional catch-up contribution of $7,500, bringing your total employee limit to $31,000.
Starting in 2025, there is a new "super catch-up" provision for workers aged 60 to 63, who can contribute an additional $11,250 instead of the standard $7,500 catch-up. This brings their total employee limit to $34,750.
The total contribution limit from all sources (employee + employer) is $70,000 for 2025, or $77,500 if you are 50 or older.
Here is how to maximize your 401(k) to hit the $23,500 limit. If you are paid bi-weekly (26 paychecks), you need to contribute $904 per paycheck. If paid monthly (12 paychecks), contribute $1,958 per month.
Every dollar you contribute to a traditional 401(k) reduces your taxable income dollar for dollar. At the 22% tax bracket, a $23,500 contribution saves you $5,170 in federal income tax. At the 24% bracket, the savings is $5,640.
Employer matching is essentially free money. If your employer matches 50% up to 6% of your salary, and you earn $100,000, the maximum employer match is $3,000 per year. Not contributing enough to get the full match is leaving money on the table.
Roth 401(k) contributions do not reduce your taxable income now, but withdrawals in retirement are completely tax-free. Consider Roth if you expect to be in a higher tax bracket in retirement.
Use our 401(k) calculator to project your retirement balance with employer matching and compound growth.