401k contribution limits employer match refers back to the most amount of cash that staff can contribute to their 401k retirement accounts annually. 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 vital for workers who’re planning for his or her retirement.
There are an a variety of benefits to saving for retirement in a 401k account. First, contributions are made on a pre-tax foundation. Which means that staff scale back their present taxable revenue by the quantity they contribute to their 401k, which may end up in important tax financial savings. Second, 401k accounts develop tax-deferred. Which means that the earnings on the investments within the account will not be taxed till they’re withdrawn in retirement. Third, many employers supply matching contributions to their staff’ 401k accounts. This may be a good way to save lots of much more cash for retirement.
