Maximum 401k Contribution & Catch-Up Limits for 2012-2013

Based on 401(k) Resource Guide at IRS.gov, the combined total contribution you can make to all of your 401(k) plans (including traditional 401(k), Roth 401(k), and individual 401(k) plans) in 2013 increased by $500 to $17,500. The catch-up contribution limit stays the same at $5,500. However, you may be limited by what your employer allows you to contribute. For example, if your salary is $40,000 per year and your employer only allows up to 20% of your salary to be used for your 401(k) contribution, then your maximum is $8,000. Otherwise, the maximum legal limits allowed by the IRS are shown below.

401(k) Maximum Contribution Limit

The contribution limit remained unchanged from 2010 to 2011. Here are the current contribution limits:

Year Contribution Limits
2013 $17,500
2012 $17,000

401(k) Catch-Up Contributions

If you are 50 years or older at the end of the calendar year, your plan may allow you to make “catch-up” contributions in addition to your normal contributions (unfortunately, not all employers are required to do this, and only some plans allow catch-up contributions). Here are the current 401(k) catch-up contributions limits:

Year Catch-Up Limits
2013 $5,500
2012 $5,500

Rules for Multiple 401(k) Plans

If you participate in more than one 401(k) plan — i.e., a Roth 401(k) and a Traditional 401(k), or plans from multiple employers — the above 401(k) limits apply to the total amount regardless of the number of plans you participate in. The limits apply to your total combined contributions; your combined contributions across all plans cannot exceed the above limits.

Employer Contribution Limit and Matching Contribution

Some employers contribute additional amount to your 401(k). These contributions are called matching contributions. Fortunately, the matching contributions made by your employer are NOT counted toward your 401k contribution limits. In other words, if you contribute the maximum amount each year, you are still eligible to receive your employer’s matching contributions above and beyond these limits.

Individual 401(k)

For self-employed business owners who participate in an Individual 401(k) plan (also known as Solo 401(k)), there is an additional piece of information that you must be aware of: With an Individual 401(k) plan, you can contribute the Employee portion out of your salary, and in addition, your company can contribute up to 25% of your W2 wages up to the Maximum Employer Contribution below.

Year Maximum Employee Contribution Maximum Employer Contribution Maximum Combined Contributions
2013 $17,500 $33,500 $51,000
2012 $17,000 $33,000 $50,000

For example, if you want to maximize your 401(k) contribution in 2013. You can pay yourself a salary of $134,000. You can then contribute $17,500 as an employee, and your company can match $33,500 as an employer for a maximum 401(k) contribution of $51,000.

Other Considerations

In addition to the basic information above, there are rules governing highly compensated employees (HCE) and specific rules impose by your 401(k) plan administrator. To understand the specifics that apply to you, be sure to review your employer’s plan documents and contact the plan administrator for more information.

Realize, too, that participation in your employer’s retirement plan limits how much you can contribute to your Traditional IRA. For more information, please take a look at Contribution Limits for Traditional and Roth IRAs.

Reference: 401(k) Resource Guide – Plan Participants – Limitation on Elective Deferrals at IRS.gov.

About the Author

By , on Nov 23, 2012
Pinyo
Pinyo is the owner of Moolanomy Personal Finance. He is a licensed Realtor specializing in residential homes in the Northern Virginia area. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, and financial literacy author.

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Leave Your Comment (3 Comments)

  1. H Bush says:

    Can an employee that qualifies for the Catch-up contribution contribute to that and the “regular” 401(K) at the same time throughout the year as long as they don’t exceed the limit on both combined for the year. Example, if someone qualifies for the catch-up contribution and they want to max what they can contribute can they elect (17500+5500)/26 = 884.61 flat deduction for the entire year. Does the law say that they have to reach the maximum normal contribution first before they can start contributing to the catch-up amount?

  2. s tomlinson says:

    I did not contribute the max thru my employer in 2013 and my wife and I make over the max to set up a Roth or T IRA.

    Is there a way to contribute to my 401k for the 2013 tax year to get to the max?

    • Pinyo says:

      @s tomlinson – Do you mean 2012? If you already contribute the max allowed by your employer, then the answer is no. The only exception is if you have self-employment income. If that’s the case, you can set up solo 401(k) for you and/or your wife. You can contribute the difference and max out your 401(k) between the two plans.

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