What is the 401(k) contribution maximum?

For 2020 the IRS max contribution to a 401(k) is $19,500. You may want to designate an amount to be deducted from each paycheck and contribute at least enough money to the 401(k) to take advantage of your employer’s full match, if available.

If you find that you have additional income after contributing the minimum to get the full match, assuming you’ve already paid off high-interest debt and saved an emergency fund of greater than 3 months of expenses, you are allowed to contribute additional income to a max of $19,500 for your individual contributions. According to Investopedia, the combined employee/employer contributions are allowed to exceed $19,500 to a max of $58,000 for those under 50 years of age in 2021.

Agree? Disagree? Have something to add? I’d love to hear your thoughts.

Disclaimer: The above is an opinion intended for information purposes only. Seek a licensed professional for financial advice.