401(k) plan Close
A 401(k) plan is a defined-contribution plan that permits employees to have a portion of their salary deducted from their paycheck and contributed to an account. Federal (and usually state) taxes on the employee contributions and investment earnings are deferred until the participant receives a distribution from the plan (typically at retirement). Employers may also contribute to the account of a participant. For 2019, you may contribute up to $19,000 to a 401(k) plan. If you are age 50 or older, you may contribute an additional $6,000, or a total of $25,000. If your employer makes contributions, the most that may be contributed to a 401(k) plan for 2019 is the lesser of $56,000 ($62,000 if age 50 or older) or 100% of your compensation.