Responsible Retirement: What's the Maximum Amount You Can Contribute to a 401(k)?
Using a 401(k) plan to save for retirement is one of the more effective ways to reach your financial goals later in life. If your employer offers one, it’s important to take advantage of this automatic savings opportunity. In some cases, your employer may even match a portion of every dollar you put in, contributing what’s essentially "free money" to help build up your savings and lead your desired lifestyle once you leave the workforce.
There are limits, however, to the amount of your pay you can contribute to your 401(k) each year, and by November every year, the Internal Revenue Service (IRS) releases the maximum amount you can contribute for the following year. To help you navigate the IRS limits for 2021, we’ve rounded up the essentials you need to know about responsible retirement and the ways you can maximize your 401(k) and other retirement accounts this year.