401k contribution limits employer match refers back to the most amount of cash that workers can contribute to their 401k retirement accounts every year. Employers are additionally allowed to make matching contributions, as much as a sure restrict. For 2023, the 401k contribution restrict is $22,500, and the employer match restrict is $66,000. Understanding these limits is necessary for workers who’re planning for his or her retirement.
There are a number of advantages to saving for retirement in a 401k account. First, contributions are made on a pre-tax foundation. Because of this workers cut back their present taxable revenue by the quantity they contribute to their 401k, which may end up in vital tax financial savings. Second, 401k accounts develop tax-deferred. Because of this the earnings on the investments within the account should not taxed till they’re withdrawn in retirement. Third, many employers provide matching contributions to their workers’ 401k accounts. This may be a good way to save lots of much more cash for retirement.
