Learn the max you can save in your Roth 401(k).
Fidelity Smart Money
Key takeaways
- Each year, the IRS determines the maximum that you and your employer can contribute to your Roth 401(k).
- For 2023, the Roth 401(k) contribution limit is $22,500. In 2024, the max is $23,000.
- If you are 50 or older, you can save $7,500 more in your Roth 401(k) as a "catch-up contribution" for both 2023 and 2024.
Roth 401(k)s let you invest dollars you've already paid taxes on for retirement. You can then withdraw your contributions—plus any investment growth—tax-free once you've turned 59½ and at least 5 years after the first contribution to your Roth account. These tax advantages can make Roth 401(k)s an appealing way to save for the future, but as with other retirement accounts, there are important contribution limits to keep in mind.
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Roth 401(k) contribution limits 2023
The Roth 401(k) contribution limit in 2023 is $22,500 for employee contributions and $66,000 total for both employee and employer contributions. Those 50 and older can save an additional $7,500 as a “catch-up contribution,” increasing their employee contribution limit to $30,000.
It's important to note that your total contributions cannot be more than your annual compensation at the company that sponsors your 401(k) plan.
If you have access to multiple 401(k)s, whether by having a traditional 401(k) and a Roth 401(k) at the same company or by having more than one Roth 401(k) at multiple companies, you cannot contribute more than your allowable employee contribution limit across all of your 401(k)s.
Roth 401(k) contribution limits 2024
The Roth 401(k) contribution limit for 2024 is $23,000 for employee contributions and $69,000 total for both employee and employer contributions. There's also a $7,500 catch-up contribution for those age 50 and older, which raises the employee limit to $30,500 for those eligible.
Roth 401(k) contribution limits
| Pretax and Roth employee contributions | Employee and employer contributions | Catch-up contributions (in addition to the employee and employer limit) | |
| 401(k) contribution limit for 2023 | $22,500 | $66,000 | $7,500 |
| 401(k) contribution limit for 2024 | $23,000 | $69,000 | $7,500 |
Source: IRS
Roth 401(k) income limits
Unlike Roth IRAs, Roth 401(k)s do not have any income limits. Regardless of how much you earn, you can contribute to a Roth 401(k), if your employer offers one.
What happens if you contribute too much to your Roth 401(k)?
Contributing more than your allowable amount to a Roth 401(k) may trigger additional income tax liabilities if the excess deferral amount and investment earnings are not distributed by April 15 following the close of the calendar year during which the excess deferral was made. If you wait to withdraw excess contributions after April 15 or after you file your taxes for that contribution year, you may be on the hook for that early withdrawal penalty. If distributed later, the earnings are taxed twice. They are taxed once for the year you contributed, and taxed a second time when the deferrals are ultimately distributed from the plan.
401(k) plans typically have guardrails in place to keep you from contributing more than you're supposed to. But double-check your contribution amounts to make sure you won't exceed the limit, especially if you recently changed jobs or have multiple 401(k) plans. If you accidentally contributed too much to your Roth 401(k), it's a smart idea to reach out to a tax professional for guidance on how to best remove those excess contributions.
How to maximize your Roth 401(k) contributions
Contributing to your Roth 401(k) is just the first step to building your retirement savings. Consider these tips to potentially amplify the impact of those Roth 401(k) savings.
1. Prioritize any matching
Many employers encourage you to save for retirement by contributing a percentage of what you save in your 401(k) each year through what's called a 401(k) employer match. This usually means they contribute $0.50 or $1 for each $1 you do, up to a certain percent of your salary.
If your employer offers a 401(k) match, aim to contribute at least enough to your 401(k) to earn the full amount. This is free money and could help to bolster your retirement savings over time.
2. Contribute early and often
One of the keys to a successful retirement is saving as early as you can. The longer your money is invested, the more time you have to potentially benefit from compound interest, a snowball-type effect where your investment returns begin to earn investment returns.
Starting to save for retirement early could be especially beneficial to those with Roth accounts. Because people's earnings (and tax rates) may rise as they age, younger workers in particular may prefer Roth accounts to allow for long-term, tax-free growth.
3. Always remember your Roth 401(k) when changing jobs
There's a lot to juggle when changing jobs, but try not to forget about your retirement accounts. If you settle in with a new employer, make sure to decide on a plan forwhat to do with your old 401(k).
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