2017 401k Plan Contribution Limits – Maximum You Can Contribute

by Ryan Guina

Investing in your 401k plan or other retirement account is one of the best ways to prepare for retirement. These accounts offer an incredibly valuable tax advantage for investors. But there are limitations to these plans. Each year the IRS evaluates and releases updated 401k Plan Contribution Limits. These limit is the maximum you can contribute based on your age.

While the IRS won’t increase contribution limits every year, they also won’t decrease the contribution limits either. At worst, contribution limits will remain stagnant.

The maximum employee deferral for 2017 is $18,000 per person. There is also a maximum Catch-up Contribution of $6,000, which is only available to participants age 50 and over. These rates have remained the same since the 2015 tax year.

There was, however, a $1,000 increase to the Total Contribution Limit for 2017, which comes to $54,000. The max deferred compensation includes employee contributions, matching contributions, bonuses, and other deferred compensation. (If you are over age 50, you can also add your catch-up contributions to this number, bringing the max total deferred contribution limit to $60,000 for 2015).

Let’s take a look at all of these numbers in more detail and discuss what they mean for investors.

Maximum 401k Contribution Limits – 2007 – 2017

401k Plan Contribution LimitsHow to read this chart: The following chart lists the maximum 401k plan contribution limits, along with the contribution limits from previous years. The number under the heading “Employee Contributions” applies to persons under age 50. “Catch-up Contributions” apply to people age 50 and over.  The column labeled “Total Contribution Limit” is the maximum you can apply to your 401k plan in any given year, if you are under age 50. This includes all possible contributions, including employee contributions, employer contributions, profit sharing, or any other allowable contributions. The final column is the total contribution limit from all sources for those who are age 50 or older.

Employee Contributions
Catch-Up Contributions (Age 50+)
Total Contribution Limit
Total Contribution Limit w/ Catch-Up
2007 $15,500 $5,000 $46,000 $51,000
2008 $15,500 $5,000 $46,000 $51,000
2009 $16,500 $5,500 $49,000 $54,500
2010 $16,500 $5,500 $49,000 $54,500
2011 $16,500 $5,500 $49,000 $54,500
2012 $17,000 $5,500 $50,000 $55,500
2013 $17,500 $5,500 $51,000 $56,500
2014 $17,500 $5,500 $52,000 $57,500
2015 $18,000 $6,000 $53,000 $59,000
2016 $18,000 $6,000 $53,000 $59,000
2017 $18,000 $6,000 $54,000 $60,000

These Contribution Limits Apply to 401k, 403b, 457, 401a Plans, and Thrift Savings Plan

These contribution limits apply to more than just the 401(k) plan – they actually apply to several different retirement plans that are written into the tax code. These limits also apply to Individual 401k Plans. It is worth looking into your specific plan as there may be slight differences you should be aware of, particularly when it comes to employer contribution rules, profit sharing, or other plan specific topics. TheMilitaryWallet.com covers Thrift Savings Plan contribution limits to discuss some of these examples as they apply to the Thrift Savings Plan, which is similar to a 401(k) plan, but is only available to military members and certain government employees.

These contribution limits also apply to the Roth and Traditional versions of the 401(k) plan and similar employer sponsored retirement plans.

Maximize Your 401(k) Contributions if You Are Able

If you are able to maximize your 401(k) contributions, you should be well on your way to setting yourself up for a solid retirement fund. There are two easy ways to determine how much to contribute to maximize your 401(k) account this year.

Flat contributions: If your company allows contributions of a flat dollar amount per month or per check, then simply contribute that amount from your paycheck. If you are under age 50, then you would be able to contribute up to $1,500 per month (or $750 if you are paid twice each month). If you are age 50 or over, you can contribute up to $2,000 per month, or $1,000 per check if you are paid twice per month.

Percentage based contributions: If your company doesn’t allow you to make a flat rate contribution, then you will need to do a little math. To do this, divide the maximum you can contribute (either $18,000 or $24,000) by your total salary. The percentage you see is how much you should contribute every paycheck. For example, if you earn $100,000 per year and your can contribute up to $18,000 to your 401k, you need to contribute 18% of your salary ($18,000 / $100,000 = 18%).

If you cannot afford to contribute up to the maximum, then try to at least contribute up to your employer match if your employer makes matching contributions. The employer match is part of your compensation package, and is essentially free money. Not contributing up to this amount is like leaving free money on the table! You should be able to change your 401k contribution amount, your tax withholding, and other similar actions through your Human Resources Department.

IRA or 401k? – Which is Better for Retirement Planning?

IRA or 401(k)? Another consideration when contributing to your 401(k) plan is whether or not you should contribute to it at the expense of contributing to a Roth or Traditional IRA. I covered this topic in a previous article – where should you invest first – IRA or 401(k)?

In general it is best to contribute enough to maximize any employer contributions you may be eligible for, then try to max out a Roth IRA if you are eligible to contribute.

If you can afford to maximize both investments, then go for it! Here is more information regarding the IRA contribution limits. Whichever you choose, you are doing the right thing by saving and investing for your retirement.

Visit the IRS website for more details regarding 401k plans and other retirement plans.

Published or updated February 2, 2017.
Print or e-mail this article:

{ 26 comments… read them below or add one }

1 Kristen

Interesting post Ryan. My company as a non-profit has a 403b, but they don’t match our contributions. However, lest anyone think I work for a stingy company, they have a pension plan that they pay into for each employee.

I haven’t been doing any retirement investing in the past year. (I know … Shame on me!) I’m going to talk with my financial planner about starting an IRA. I’m thinking it would make more sense for me to invest in an IRA than the 403b, since there’s no matching money there. Any thoughts?


2 Ryan

Kristen: Pensions are awesome, and extremely rare these days. It’s a great thing you have one!

I think you should invest additional funds for retirement because your pension + social security probably will not be enough to cover your retirement needs. I don’t know enough about your situation to recommend investing in an IRA over your 403b, so speaking with your financial advisor is your best bet.


3 Jeff Rose


Generally speaking, your correct in your thoughts in starting an IRA. I say “generally” because as Ryan says, I don’t know enough about your situation. Without a match in your 403b, opening an IRA will allow you to invest in many more options that the limited offering in your 403b’s. Also, the 403b realm is changing and by what I’ve seen thus far, not for the better. I could elaborate, but don’t want to put anybody to sleep 🙂

Definitely suggest meeting with your planner to see if the IRA makes sense and whether you should go the Traditional or Roth direction.

Good luck!


4 doctor S

I just hope your money is with my company! I reccomend the roths just b/c U wont have to worry about it later, but thats just my opinion.


5 Ryan

doctor S: My money is spread around a few different places. I need to work on consolidating my retirement accounts this year! I agree about the Roth. So long as the government doesn’t change rules about the money you already have in there, a Roth is probably the best deal you will find. 🙂


6 Andy

Generally a good idea to max out contributions if possible. The only caveat I have is to consider more than target retirment/401K funds. Just look at their performance over the last 3 years compared to regular 401K funds.


7 Todd

I have a questions I’m hoping someone can answer. My company offers a match on contributions but you are only allowed to contribute a % based on salary. I get screwed because a large part of my income is from bonuses and commissions since I am in sales. My questions is can my company structure the 401K plan this way?


8 Ryan

Todd, Yes, a 401k plan is voluntary for the company and they can structure their 401k plan as they see fit. You can contact your HR department and ask if you are able to contribute a portion of your bonuses toward your 401k plan (some companies allow this).


9 mark

I am eligible for the catch up and evenly divided my contributions to take full advantage of the catch up. My employer matches up to a certain percentage but when I reached the base $16,500.00 limit before reaching the catch up, my employer’s match contributions stopped and I was told it won’t contribute anything more once the base amount is reached. therefore I lost out on over $1,000 in company match. Is this normal?



Mark: your employer is being unfair.
im our Plan administrator, and this seems to me like your plan admin isnt doing a good job. The reason we have this Plan at our firm is to attract, and retain quality staff. I view this as our best benefit, and it sounds to me that either your plan admin isnt informed, or someone is trying to skimp on the plan. In the end, it sounds like they will have at least one unhappy camper on their hands.
you may have to ask your CFO or some other better informed corporate officer about this.


11 nimrod

what is the percentage limit on employer securities in a 401 (k) plan?


12 Chris


There is no limit per se but new rules were passed in 2010 that require employers to offer diverse options (minimum of 3) in retirement plans.


13 wm.l.pekar

If you max out a 403b can you participate in the new 401k pension plan at work. The employer decided to go from a defined pension the the 401k style.

Thanks wm. l. pekar


14 Ryan

I recommend double checking with your plan administrator or a financial planner. I believe your annual contributions are limited to a fixed amount across all employer sponsored retirement plans, but I am not 100% certain in this instance.


15 al

I have seen conflicting information in 401K articles to a question I have. Perhaps someone can set me straight. My employer is quite generous as to 401K / retirement benefits. I will turn 50 this year. My question concerns the catch up provision and the “total contribution limit”. I plan to contribute the max individual contribution of $17K in 2012. My employer contribution when added to my individual contribution will bring my total contribution to $50K. My question is does the catch up provision act to increase the total contribution limit from $50,000 to $55,500 for individuals 50 and older. The chart in this article suggests not but I have seen other charts that suggest that the total contribution limit is increased to reflect the allowed catch up. Any clarity on this point is much appreciated.


16 Tom

If I am contributing $17,000 (the maximum) to the Fed Govt’s TSP, can I also contribute to a Roth IRA outside of the TSP? Or does the $17,000 maximum include any outside contributions like a Roth IRA? [Note: I am over 50 and also interested in beginning the allowable make-up contributions to the TSP.]
Thank you…


17 Ryan

Tom, the Thrift Savings Plan (and 401k, 503b, and related employer sponsored retirement plans) are separate from IRAs. You should still be able to contribute the max amount to your IRA, provided you meet the income requirements. We cover this topic in the following article: how many retirement accounts can you have?


18 Matt

I have a Traditional 401k at work I contribute to and a Roth401k that I contribute to. Both of these plans are through my employer. In addition to both of these accounts I want to contribute to a roth IRA with my online broker. Is that permissible ? I really want to sock away as much as I can for retirement.


19 Ryan Guina

Absolutely, Matt. You can contribute to a Roth IRA in addition to an employer sponsored retirement plan (as long as your income allows you to contribute to a Roth IRA). Best of luck with your retirement investing!


20 Elizabeth Hawkins

Thanks so much for this article. I will turn 50 at the end of 2015. I always max out my Roth 401k contribution. Can I distribute the increased contribution amount of $24k throughout 2015 or do I have to do a catchup contribution once I turn 50? Also, can I contribute the increased Roth IRA amount any time during 2015 or do I have to wait until my birthday? I would really appreciate the clarification.


21 Ron

Greetings! Sorry for asking a question on an older article, but your responses are awesome… so I thought that I would give it a shot. I have about $50K in a traditional 401K that I started not too long ago and my employer now offers a Roth 401K as a plan option. I have the option of contributing to one or the other, or both. It looks as though I can move my $$ from the traditional 401K into the Roth 401K if I choose, but I would expect that I would be required to immediately pay the associated taxes on the $50K. I have about 25 years left to save and am wondering whether it would be best to continue with the traditional 401K or move everything over to the Roth 401K now while it’s still early-ish or split my contributions. What are the benefits or downside to splitting my contribitions. I have other investments in Real Estate… but now that I am in a more traditional work environment, I want to take the best approach to maximize my retirement savings. Thanks for any help you can provide!


22 Ryan Guina

Ron, this is a great question, but one that is specific to your situation, and probably deserves a better answer than I can give you in a paragraph or two on a blog post. The best thing to do would be to meet with a financial planner and have an assessment done on your current financial situation, your long term goals, and have him or her help you build a plan to get there.

To answer your questions: yes, if you transfer your traditional 401k into a Roth IRA, you would have to pay taxes on those funds. I can’t tell you if it is worth it or not, because I don’t know your entire financial situation, or whether you have the cash to pay the taxes now (you generally don’t want to pay taxes out of the invested funds because that taxes money out of a tax-sheltered environment).

Should you invest in the Roth or Traditional going forward? Again, this is a long-term planning issue that a financial planner can help you answer. I’m a big fan of investing in Roth accounts because you never have to pay taxes on those funds again. But some people prefer to invest in a Traditional 401k due to the tax breaks they get now. Again, this is where a financial planner will come in handy. I recommend meeting with a fee-only financial planner if you are more of a DIY investor. They can help you make sense of everything and make sure you are on the right path. Here are tips for interviewing and hiring a financial planner. I hope this helps!


23 Stephan

Hello – I work for a small Tech company with about 15 employees and it looks like most employees don’t contribute to the company sponsored 401(k) plans (Roth and Traditional). As a result, the 4 or 5 of us contributing (mainly the ones with the highest incomes), have received checks for excess contributions, although in my case, my contribution was 35% below the employee contribution limit set by the IRS.
Can you explain why this is happening, for the explanations from the plan managing company (we outsource that) are a bit confusing (something about avoiding company executives to elect a plan not accessible or not as rewarding to lowest paid employees.)
Thank you.


24 Ryan Guina

Hi Stephan, it sounds like your company ran into he Highly Compensated Employee rule. This is something I’ve read about, but not an expert on. Here is an IRS article that discusses the rule, and one from Personal Capital that also discusses it.

Right now the best I can recommend is reading more about this topic to verify this is indeed what happened. Then try to work with your HR department and management to try and find a way to prevent this from happening again. Best of luck!


25 JoAnn

Our company 401k plan will not be implemented until Q4 of this year. Will employees be able to accelerate the payments and fully fund for the year?


26 Ryan Guina

JoAnn, your 401k contributions must be made from your paycheck. So you can elect to put up to 100% of your pay (or close to it) into your 401k each pay period. But you won’t be able to save money throughout the year and write a check to fund your 401k. All contributions must be made directly from your paycheck. So if you want to fully fund your 401k, you will want to save cash in your savings account, and contribute most of your paycheck to your 401k during Q4. You would have to live off savings for those months while you contribute to your 401k. When the new year rolls around, you can change your contributions to a more reasonable percentage of your pay. Hope this helps.


Leave a Comment

Previous post:

Next post: