What Happens If You Contribute Too Much to 401k?

October 5, 2021

The maximum amount that an employer and employee can contribute to the 401(k) plan gets adjusted periodically to reflect inflation. For 2021, the limit on the employee contribution is $19,500 per year for workers under age 50. For people over 50, an additional $6,500 is added as a catch-up contribution.

In case of matching employer contributions, or if employees elect to make additional after-tax contributions, the total employee/employer contribution for workers under 50 is limited to $58,000, or 100 percent of employee compensation, whichever is lower. For those 50 and over, the current limit is $64,500.