How much can I contribute to a 401(k) plan this year?

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Retirement savers can contribute $18,500 in a 401(k), 403(b), most 457 plans and the Thrift Savings Plan in 2018, up $500 from last year. For people 50 and older, the additional catch-up contribution limit is unchanged at $6,000 more.

Other important facts to know, according to the Internal Revenue Service:

Contributions, also known as deferrals, as well as employer matches and discretionary contributions or allocations of forfeitures to your accounts, should be the lesser of either 100% of your compensation level or $55,000 in 2018 (or $61,000 with catch-up contributions).

Employers may offer automatic enrollment or automatic increases to 401(k) plan contributions. The former takes money out of an employee’s pay before tax and automatically places it into a 401(k) (usually around 3%), which qualify as elective deferrals. Employees can opt out of this, though it does ensure there’s some money saved for retirement and has helped savers stash away maybe $29.6 billion for retirement.

401(k) plan requirements cannot require employees work more than a year at the company, though some companies may have to wait until they’re eligible for matching contributions and others may have vesting requirements, which means you have to work a specific number of years before those matched contributions are completely yours.

If an employee over-saves in a 401(k) plan, they have to act fast. Excess deferrals as well as any money earned from those extra dollars must be refunded by April 15 so that it is reported as regular income. If done after Tax Day, late distributions are subject to extra taxes and penalties. Companies may automatically stop contributions once the maximum is reached, but not always, so savers should check their accounts.

See: So you’ve maxed out your 401(k)? Here’s where else to save

“401(k) plan contribution limits” was the top query related to 401(k) plans on Google at the end of 2017, according to Google Trends. Here are some others:

Proposed 401(k) changes by Congress

There was talk of drastically changing 401(k) plans late last year, before the tax bill was passed. Reports suggested the contribution limit would be dropped to $2,400 per year, or somewhere between there and the then-current limit of $18,000. Others thought Congress might “Rothify” these accounts, by taxing contributions before investing them. Traditional 401(k) plans are tax-deferred, which means they’re taxed at withdrawal. The new tax bill ended up not including either of these ideas, but still affects retirement savers and retirees, such as stopping “recharacterizations” of individual retirement accounts (which allow savers to undo decisions to rollover or convert accounts to Roth IRAs) or inspiring some to move to another state.

Roth 401(k) vs traditional 401(k)

Traditional 401(k) plans are employer-sponsored accounts that allow employees to save pre-tax dollars from their wages for retirement. A Roth 401(k) is also employer-sponsored, but contributions are invested with after-tax dollars and withdrawals are not subject to federal income tax (so long as you’re 59 ½ years old and have had the account five years).

They have the same contribution limits as traditional 401(k) plans, though employees will see more taken out of their take-home pay because their wages will be taxed before a portion is invested into their retirement plan. To make the best decision, employees have to estimate what tax bracket they’ll be in during retirement and assess what makes the most sense for them. Employees cannot have both a traditional and Roth 401(k) plan.

Also see: Four ways to change 401(k) plans for the better

401k withdrawal age

Retirement savers cannot withdraw from their 401(k) plans before they turn 59 ½ years old (unless they become disabled or are separated from their employer after turning 55 years old). If distributions are made before 59 ½ years old, savers have to pay an additional 10% tax on the distribution (loans up to 50% of vested account balances are also allowed depending on the employer and plan, though they must be repaid within five years).

The money can’t stay in the account forever, though. Beginning April 1 of the calendar year in which the account holder reaches 70 ½ or retires (whichever comes later), retirement savers must start taking required minimum distributions.