What is a Retirement contribution limit?
A retirement contribution limit is the maximum annual amount that employees and employers can contribute to qualified retirement accounts under IRS regulations, with standard limits applying to most workers and enhanced catch-up limits available for participants age 50 and older. For 2025, the base employee deferral limit for Traditional 401k and Roth 401k plans is $23,500, with an additional $7,500 catch-up contribution allowed for eligible older workers. These limits apply separately to employee deferrals and employer contributions, creating combined annual maximums that can exceed $70,000 for highly compensated participants in plans with generous employer matching and profit-sharing provisions.
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