2016 vs 2015 401k, 403b Contribution Limits and Catch-up Amounts


[Updated with 2016 contribution limits] The IRS has released 2016 employer sponsored retirement plan limits, which covers 401(k), 403(b), and Government Thrift Savings (TSP) plans.  The  annual contribution limit, which is indexed to inflation, remained unchanged. So like 2015, the maximum amount employees will be able to contribute on a pre-tax basis in 2016 will be $18,000. The catch-up pre-tax contribution limit available to employees over 50 remained unchanged at $6,000. Details are in the table below.

The maximum limit for defined contribution plan deferrals from all sources (employer and employee combined) will stay at $53,000 per participant. Employers who contribute to these plans (e.g via matching contributions) also saw no increase in annual contribution limits.  See details and additional explanations below the table.

Contribution Limit
Maximum Employer Contribution
Max. for ALL Contributions (excl. Catch-up)
Additional Catch-up Amount (age > 50)

Your 401k maximum contribution limit is the combined total maximum contribution that you can make each year to ALL 401k plans in which you participate, including standard 401k plans and Roth 401k plans— and is the lower of: (1) the maximum percentage contribution limit allowed under each of your employers’ plans, or (2) the dollar limits shown in the table above. For example, if your employer’s 401k plan allows you to contribute up to a maximum of 10% of your salary, and you earn $50,000, your maximum contribution limit is $5,000, not the $17,500 contribution limit that applies only to higher-paid employees.

Additional total limits. In addition to the limit on elective deferrals shown in the table above, annual contributions to all of your accounts may not exceed the lesser of 100% of your compensation. Further, the compensation limitation that can be taken into account when determining employer and employee contributions is $265,000 for 2015 vs. $260,000 for 2014.

Maximum Employer Contributions. Matching 401K or 403b contributions made by your employer are NOT counted toward your annual 401k contribution limits (elective deferrals). Even if you contribute the maximum amount each year, your employer’s matching contributions are in addition to these 401k limits.  Your employer’s 401K maximum contribution limit in 2014 is $34,500 ($52,000 –  $17,500) or 100% of your salary, whichever is the smaller amount. Though most employers rarely give anywhere near the maximum, with most generally matching 3% to 6% of employee contributions.

Catch-up contributions. If you are age 50 or over at the end of the calendar year, you are permitted to make additional, “catch-up”, elective deferral contributions. These catch-up contributions are not subject to the annual general limits that apply to 401k plans. The catch-up contribution you can make for a year cannot exceed the lesser of the annual catch-up contribution limit, or the excess of your compensation over the elective deferrals that are not catch-up contributions.

Note: When filing your 2014 tax return in 2015, you need to refer to the 2014 limits. The 2015 limits are applied to 2015 tax returns filed in 2016.


[Updated for 2013 contribution limits] The IRS has released 2013 employee sponsored retirement plan –  401k, 403b, and Government Thrift Savings Plans – limits and employees will be able to contribute an additional $500 per year, up to $17,500,  on a pre-tax basis next year. This was the second consecutive year of increases to contribution limits.  The catch-up contribution limit available to employees over 50, remained unchanged at $5,500.

The maximum limit for defined contribution plan deferrals from all sources (employer and employee combined) increased to $51,000 per participant from $50,000 in 2012.


[Updated for 2012 contribution limits] The IRS has now released the official 2012 401k, 403b and other retirement plan contribution limits, which reflect a $500 increase over the 2011 standard contribution limit. This is a result of higher inflation and the latest cost of living adjustment (COLA) figures. The 2012 contribution limit is the first increase in three years. Each year in October these limits are adjusted according to a formula based on the inflation rate (linked to COLA) in the third quarter vs. the previous year’s quarter.

What this means for your 401k, 403b and other retirement plans: The maximum amount an employee can contribute to a 401k in 2012 will increase to $17,000 and for individuals over the age of 50, their catch-up contribution will remain unchanged at $5,500 (see table). The Federal government’s Thrift Savings Plan and other retirement-savings plans – like 403(b) and 457(b) plans – are subject to the same limits.

According to a recent survey of more than 550,000 401k accounts, very few Americans are actually saving the maximum allowable per year. Only 7% of workers with a 401(k) plan came within $500 of contributing the maximum allowed by the IRS or their plan limit and that on average, retirement plan participants contribute 6.8% percent of their salaries on a pre-tax basis.

2012 Maximum Employee and Employer 401K Contribution Limits and Catch-up Amounts

Contribution deadlines: Remember, unlike IRA plans where you have until April 15th (tax filing deadline) of the subsequent year to make contributions, you must make all your 401K or 403b contributions within the calendar year. Some employers do offer extensions, but rarely is this the case.

[Previous Update – Oct 2009] Many workers have failed to take advantage of higher limits in 401K plans over the last few years. Not surprising given the stock market crash of the year past, which meant that the last thing people probably wanted to look at and deal with was their 401K retirement accounts. However, investing via your employer sponsored 401K or Individual retirement plan (IRA) is still your best form of automatic long term investing thanks to the tax deductions, employer matches and the benefits of compounding. Even fractionally increasing your 401K contributions can lead to significantly higher retirement savings down the road.

More on the 401K limits and contribution rules

The 401k contribution limit jumped up to $16,500 as of January 1st, 2009 (which is unchanged in 2010). That’s a $1000 (6.5%) jump from the $15,500 limit in 2008.

Catch up Contribution Limits for those 50+ has also increased

If you are age 50 or older and your employer allows it, you are also be eligible to make “catch-up 401k contributions” in addition to your regular 401k limits. These catch up contribution limits have also increased to a total of $5,500 which brings the 2009/2010 maximum 401K contribution limit to $22,000 for those over 50. For all those people who feel that they do not have enough of a retirement nest egg, this higher contribution gives them a great tax free opportunity to catch up.

Next Steps

With the stock market in recovery, investing now could be the best decision for many to restart investing in their retirement accounts, or to increase your contribution you normally need to contact your payroll/benefits department or your 401K administrator (like Vanguard, Fidelity etc), and make sure you have the right asset allocation for your age. If you cannot afford to contribute up to the maximum, then try to at least contribute up to your available employer match.

What 2011 401K limits could look like

After no change in 2010 401K , thanks to near zero real inflation, it is likely that in 2011 we will only see marginal increase again. However some new retirement legislation like 401K/IRA to Roth IRA rollovers are still available in 2011 and could be beneficial for many looking to implement smart tax strategies in a rising tax environment and possible expiration of bush tax cuts.

Based on the most recent CPI data, inflation is running at about 2%. Given a sluggish economic environment and various forecasts it is likely that inflation will stay around this level. So extrapolating from this we can expect between a 0% (current levels) and 2% rise in the retirement account limits

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71 Comments on "2016 vs 2015 401k, 403b Contribution Limits and Catch-up Amounts"

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Wednesday 9:30 am

Match-eligible participants can receive 50% of their contribution amount, up to the first 6% of eligible pay, with a maximum match of $1,000 in 2014. How much should I contribute to get $1000?
How to calculate this?

Saturday 1:02 pm

I am currently enrolled in a employer sponsored 401K and am doing catch up since I’m currently 68. If I plan to retire this year before year end..can I still put the maximum of 24,000 (2015) in my 401K before I retire, or do I have to pro-rate what I contribute based on the portion of the year I plan to work?

Sunday 9:38 am

I am contributing the max of 15% of my paycheck, I will reach the max allowable by goverment in July, what happens then? The plan stops witholding? That would be good except I will lose the 5% match by company for the rest of the year!!!!!

Friday 9:47 am

It depends on your company. At a lot of companies the plan administration leaves it to the employee to check contributions. If you over contribute you will have to pay it back at tax time and may face a penalty for over contribution.

Yes the match is only for the maximum allowed amount. So you lose it once you hit the max.

Thursday 8:23 am

If I just got a new part time job making 28,000 is there any reason why I can’t save the maximum $17,500 in my employers 403b? Thank you!

Thursday 10:44 am

For 2012 and 2013, the IRS has published guidelines that specify a total of employer and employee contributions in a 403b plan cannot exceed the lesser of $50,000 for 2012 and $51,000 for 2013 or 100% of includible compensation, plus any age 50 catch-up contributions.

But the 100% of employee’s includible compensation is based on comp for your most recent year of service. So this year you should be able to contribute the full $17,500 – assuming you stay employed.

[…] of the year. If the “Retirement plan” box is checked, special limits may apply to the amount of IRA contributions the employee may […]

[…] first $2,000 workers voluntarily contribute to tax advantaged retirement plans such as IRAs and to 401(k). The credit is available in addition to any other tax savings that apply to the […]

[…] your spouse if applicable) already contribute to an employer sponsored retirement account, like a 401K or 403b plan. Secondly you need to see what you can contribute based on your Modified Adjusted Gross […]

Dave S.
Wednesday 8:20 pm

I am 59, I have not made any catch up contributions to my 401K. Am I limited to the $5500 each year now or can I contribute more since I did not in previous years?

Wednesday 9:15 pm

You can make catch-up contributions of $1,000 since you are over 50 (to an annual total maximum of $6,500). Unfortunately, though you cannot make retroactive contributions for years you missed out on, since April 15 of the following tax year is the cut-off date.

[…] tax bracket and hence face a much lower tax bill (or refund).The maximum amount an employee can contribute to a 401(k) is $17,000 and for individuals over the age of 50, they can make extra catch-up contributions of […]

[…] are having to tap one of their most important and final saving vehicles – their company sponsored 401k or 403b (tax advantaged) retirement plans. There are 3 ways that cash can be taken out from a 401K […]

[…] Gross Incomes (MAGI) of less than $100,000 in the year of conversion were allowed to convert from a 401K or traditional IRA plan to a Roth IRA. This meant that many “higher-income” individuals […]

[…] maximum 401k and IRA contribution limit in 2012 is $17,000 (pre-tax), but more than 50% of Americans do not […]

Tuesday 10:58 pm

With a defined contribution plan (Safe Harbor and profit sharing) and a matching 401k plan, all contributions in total will exceed the $49,000 limit. In the total amount calculated to reach the $49,000 limit, does the catch-up $5,500 that I put in above the 16,500 count in the $49,000 upper limit? As such, the last payment of the year, the profit sharing piece from the company, has to be limited to the remaining gap to reach the $49,000. But i and the company are questioning if my catch up $5,500 is including in that $49,000, therefore the profit sharing has to be lower then the determined amount for employees. (difference is paid out in another form.)

Wednesday 5:10 am

We have a 403b where I work and when we retire we are paid for 100 sick days if we have 100 days accrued. One of the accountants wants to have our contract changed to state that we can either accept this as a cash payment (which is what they do now) or we can opt to have this deposited into our 403b to save on the taxes. From what I am reading in your post, I am thinking that this money could only be deposited up to the maximum employee contribution for the year as this is our own accrued money and not the school districts contribution (also, they do not contribute to our 403b only the employees do).

[…] make catch-up contributions up to $5,500 in 2011 and 2012. The following plans are covered by this maximum limit : 401(k), 403(b), and governmental 457(b) plans. Plan contributions are not treated as catch-up […]

[…] economy recovers and corporations start hiring and spending more freely. So bottom line is to keep contributing as much as you can, while keeping an eye on how your retirement account performs relative to the […]

Janet Riessman
Friday 12:48 pm

Question: I just started at a job and plan to contribute the max to my 403(b) account. I am currently 49 years old, but turn 50 in August. Am I allowed to take advantage of the Age 50 Catch Up Contribution beginning now (Feb), as when I file my 2011 taxes I will be 50, or literally can I not contribute until I turn 50 in August? If the latter is the case, I assume I can contribute that extra $5500 in the months between my 50th birthday and the end of the calendar year ($1375 extra per month Sept-Dec)…?

Many thanks!

Saturday 11:00 am

Janet – According to the IRS, you can only make catch-up contributions when you are at age 50 or over at the end of the calendar year. So as you were 49, at the end of 2011 you won’t be able to make catch-up contributions for that tax year (even though you have till April 2012 to make contributions). But this year (2012) you will be eligible to make the full – $5,500 – catch-up contribution amount.

Monday 3:16 pm

can both my wife and i contribute to 401k’s for the maximum amount (at diferent companies) of f approx $17,000? I’m over 50… so i can invest the extra catch up amount….

or can I contribute to my hospital’s 401k + catch up and can she invest in a ira or roth ira at the same time? are there any maximum amounts for couples?

Tuesday 9:11 am

You can both contribute to your 401K plans as the limits are individual (unlike taxes, where couples have joint income thresholds). This also includes the catch-up contributions. Maximum limits for all retirement account contributions can be found here : http://www.savingtoinvest.com/2011/11/2012-maximum-employee-and-employer-401k-contribution-limits-and-catch-up-amounts.html

Friday 6:31 pm

Assume you are covered by a defined-benefit plan and you contribute a certain amount for this plan. If, in addition, you have a 401(K) and 457(B) plan in effect, what is the total amount you are allowed to contribute to all of these three plans. Is there an overall annual limit applicable to these three plans together?

Thursday 12:22 am

[…] 2012, the maximum employee elective contribution you can make across all 401k plans is $17,000 (vs. $16,500 in 2011). The 2012 maximum annual […]

Jay Wilcox
Tuesday 6:29 pm

What is the maximum contribution a Missouri city may make to its employees’ 401K plans?

Tuesday 10:49 pm

Great question and I updated the post with the information. Your employer’s 401K maximum contribution limit is is $49,000 or 100% of your salary, whichever is the smaller amount. Though most employers rarely give anywhere near the maximum, with most employers matching 3% to 6% of employee contributions. Technically, this means that your employer could contribute up to $32,500, if they wanted to, and it would not count against your $16,500 personal contribution maximum .

[…] savings. This proposal would also require many employers to provide the option of a workplace-based 401(k) retirement savings plan. Employers who don’t offer 401(k) retirement plans to offer direct-deposit IRAs for their […]

Friday 10:10 am

What are the differences b/w a 401k and a 403(b) plan?

Friday 10:10 am
Answer: Very little. Both are offered by your employer, both may or may not feature employer matching contributions, both take contributions pre-tax up to a specified yearly limit, both are called “defined contribution” plans (versus “defined benefit” like pensions), and both are great ways to save for retirement. The differences between the two types of plans have been greatly minimized with the passing of the Economic Growth and Tax Relief Reconciliation Act of 2001. Remember, the names of these plans are derived from the section of the United States Internal Revenue Code under which they are defined. The three main ones are the 401(k), the 403(b), the 401(a) and the 457. So, it’s not necessarily the case that the plans are different, they’re just specified in different sections. That being the case, the main difference is that the 401(k) is offered by for-profit businesses whereas the 403(b) is offered by… Read more »
Thursday 11:15 pm

What is the maximum amount that an employer is allowed to contribute to an employee’s retirement plan – for a non-profit corporation, if that makes a difference.

Tuesday 1:28 pm

Can you contribute the limit 16,500 to 401k and then contribute to your 403b at another job up to 16,500? which total 33,000 a year for retirement.

Tuesday 1:33 pm

No. The maximum contribution limit is $16,500 per year to a 401K or 403b account. However you can contribute to an IRA or Roth IRA account. Here are more details: http://www.savingtoinvest.com/2011/09/2012-401k-ira-and-roth-ira-contribution-and-income-deduction-limits.html

[…] means the 2012 limits will look like the following:Most of the contribution and deduction rules for 401K and IRA type plans will stay the same. IRA to Roth IRA conversions will still be allowed but the […]

[…] at your full-time job or have retirement plans from other employment sources. However the lower 401K or IRA limits are still applicable to these kinds of plans. In determining this limit, contributions for employees […]

[…] individual pre-tax contribution limit for 401(k)s set by the IRS is currently $16,500 for those who are age 49 and younger. If you are […]

[…] 401K and 403b retirement plans are generally company sponsored and the age at which you can start taking penalty (10%) free withdrawals is 59½ . However, you must start taking the minimum distribution (based on a variety of factors) by age 70½. You will have to pay regular income taxes on any withdrawals from 401K plans. […]

c nguyen
Tuesday 5:56 pm

Hi , I am 40 yo now, and I am making more than 250K. I currently work for a small company which provide 401K. I do contribute maximum amount of $16,500. I also own a side bussiness and I did contribute a maximum amount of $11,500 this year into Sep IRA. I know that is only $27,000 total can be save for this year retirement. I used to have an accountant and I did have profit sharing plan which i can contribute about $40,000 a year. Can you help me, Is there any thing else I can set up to maximize my contribution for retirement. thank you

[…] What is the biggest difference between a 401K Plan and an Individual Retirement Account (IRA) […]

[…] the economy and stock markets tanked many people stopped contributing to their employer sponsored 401K or self managed IRA plans. However, with markets back up strongly and the economy improving, […]

dev lucas
Sunday 3:15 pm


I was in a training program making 50k per year. I worked from Jan 2010 to June 2010 and then started a job which pays very highly, because my training is now complete so salary is no longer a stipend but a huge check everymonth compared to what I made earlier.

My training program did not offer any retirement savings. So far I do not have any retirement savings. Since 2010 is already gone can I still open retirement account for tax benefit in 2010 or not?

When I asked HR division in my company they told me that I can open one for 2011 but not for 2010. Someone who is good in this area told me that I can open independent personal IRA with any of the companies like charlesschwab, fidelity etc for 2010?

I would like to what you all suggest?



Sunday 4:51 pm

You can open a personal IRA for 2010 – See this article for more options and rules : How and Where to Open a Traditional IRA or Roth IRA Account and Factors to Keep in Mind

dev lucas
Sunday 7:23 pm

Thanks much andys2i, I really appreciate your help. I read the article you mentioned. Based on that I understand that I can contribute $5000 and my non earning wife also can contribute (hopefully…!) $5000 in IRA for 2010 before April 2011.

I am planning to do this as pre tax dollars so I can save some money in taxes. My question is between me and my wife do I have option to invest more in pretax money as employee did not provide 401k plan, or do I have to content with max 10000 for us as a couple.

thanks again for your quick reply.


Sunday 10:29 am

I work for a small company where highly compensated employees apparently cannot contribute the maximum to the 401k plan because of lack of participation by other employees. I am over 59 and would normally make catch-up contributions but apparently cannot because of the current 401k rules. Does anyone know of a publication (IRS or otherwise) which clearly explains the rules regarding highly compensated employees in small company 401k plans and the rules for contributing to these plans if you are over the age of 59. Any help would be greatly appreciated. I have searhed in vain on the IRS web site and have called them only to be placed on hold over 1/2 hour several times.

[…] refinancing provides an easy way to lower their monthly payments and put that extra cash into their 401K or equity […]

[…] their own home businesses with no help from outside their families. This is because when you make a maximum contribution to your account, you also have to make the maximum contribution to our employees’ accounts. […]

Year End Tax Planning – 2010 Taxes Filed in 2011 | Government & Military Pay, Benefits and Taxes
Sunday 11:19 am

[…] consider making extra or additional contributions to your retirement accounts up to the IRS allowed limits. If you have the extra cash, this is probably the smartest way to reduce your taxable income and […]

[…] you may have retirement benefits in a variety of different accounts. You may have a 401(k), IRA, 403(b) or a privately held pension plan especially if you’re a federal, state, or government employee. […]

Sunday 12:11 pm


Would need more information, but the IRS establishes maximum contributions but allows individual employer plans to establish their own rules on contribution limits and percentages. If your employer plan is allowing you contribute 15% and you are within the contribution maximums outlined by the IRS then you should be fine.

Tuesday 3:46 pm

Hi, If I have already contributed to my ROTH IRA (maximum amount), can I also contribute to my employers 401(k) plan? (new to me this year).

Tuesday 4:56 pm

Yes. Your Roth IRA limit is 5,000 (assuming you qualify based on income limits). Your 401K contribution is $16,500 or up to 15% of your income (modified AGI). You can and should contribute to both.

Joe Black
Saturday 11:07 am

andys2i wrote:

“…to ensure that your Roth IRA contributions are deductible at year end.”

Roth IRA contributions are deductible?

John Walker
Monday 9:10 am

Ehh, the table says 2012 is depends on info released in 2011…so no CJ, it shouldn’t be 2010

[…] 2011 vs 2010 401K, 403b Contribution Limits and Rules for more […]

Wednesday 5:31 pm

If my employer limits my 401K contribution to 12%, but I’ve only been contributing 7% and I am eligible for the catchup contributions, can I use the catchup contribution percentage to bring my total to 12% of annual salary plus $5500? Their website allowed me to increase my catchup percentage to 15%, but I am wondering if the IRS puts the contributions in separate buckets and I will get in trouble even though I don’t exceed the maximum combined total.

Sunday 7:12 pm

As above…. Would need more information, but the IRS establishes maximum contributions but allows individual employer plans to establish their own rules on contribution limits and percentages. If your employer plan is allowing you contribute 15% and you are within the contribution maximums outlined by the IRS then you should be fine.

Basically, contribute as much as your plan will let you…. usually they will not let you exceed the IRS maximums.

» 2010 US Economic Outlook – Strong Growth Expected as Recession Fades. GDP Growth Continues to Rise | Saving to Inve$t
Friday 9:29 am

[…] and consumers, I am still taking a cautious approach in 2010. I have become less conservative in my 401K investment mix, yet I am still making sure that I have sufficient emergency funds available if […]

[…] regulations surrounding tax advantaged retirement plans.  You can see these articles for more on 401K Facts and IRA/Roth Rules and Limits. Keep in mind that for those 50 and older, the government has allowed […]

[…] I receive a number of questions related to Individual retirement accounts (IRA) based on related posts I have written in the past. One question that seems to come up often, is how does one actually open […]

[…] You must also have earned income equal to or greater than your contributions. In 2010, the maximum contribution to a traditional IRA is $5,000, with an additional $1,000 (total of $6,000) if you are age 50 or […]

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[…] for other purposes, you will be liable for taxes and penalties. Think of a 529 college plan as a 401K plan for college […]

[…] Andys2i Following my recently updated article on new 401K and IRA limits, I thought I would look at some of the changes being made around traditional and Roth IRA’s […]

[…] tax due over two years. Removing the limit on conversions effectively eliminates the current income limit on contributions to Roth IRAs.  Another strategy is to accelerate income and  postpone […]

[…] move higher, there’s no need to postpone them; it still makes sense to continue making the maximum retirement-plan contribution each year. Self-employed taxpayers in particular can set aside substantial sums […]

[…] majority of American workers rely on 401(k)-style plans to finance their retirements, but most do not know how much Wall Street middle men are taking from […]

[…] New 401k Contribution Limits for 2010 […]

Thursday 9:14 am

>401k and IRA catch up contributions are usually the best tool utilized by people nearing their retired status, who didn’t save early for their retirement.

Monday 8:47 pm

>Your table says the 2011 limits are announced in October 2011. Shouldn't that be 2010?

Wednesday 4:28 pm


Correct. The 401k limits for 2011 were announced in late October 2010.


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