The 401(k) contribution limit will increase to $17,500 for 2013.
No change has been made to the “catch-up provision” for plan participants age 50 and older. They will still be able to contribute an additional $5,500 for a total of $23,000.
As with the IRA contribution limit, this is an aggregate participant contribution limit meaning that contributions can be made to both a Traditional and Roth 401(k) but the combined employee contribution cannot exceed $17,500 or $23,000.
Plan participants frequently ask if the $17,500 or $23,000 limit includes contributions made by the employer. It does not. The limit of total contributions to an account is governed by a separate limit which will increase to $51,000 in 2013.
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