Employees can contribute a maximum of $18,000 per year to most 401(k) retirement plans in 2015 and 2016, according to the IRS. Employees aged 50 and over may contribute an additional $6,000 to a plan that allows catch-up contributions, yielding a maximum contribution of $24,000 per year.Continue Reading
In addition to an individual's contributions, an employer may also contribute up to $53,000 per year to an employee's 401(k) and up to $59,000 per year for employees age 50 or older, advises the IRS. The total employer contribution cannot exceed the employee's total compensation for the year.
The limit on employee deferrals to a SIMPLE 401(k) plan is $12,500 per year for 2015 and 2016, according to the IRS. Employees aged 50 and over may be able to make an additional $3,000 catch-up contribution each year. The IRS did not raise the contribution limits for 2016 but may raise the limits in the future for cost-of-living adjustments.
According to Fidelity Investment, contribution limits may differ or be restricted with some employer-sponsored retirement plans.Learn more about Financial Planning