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| Meta Title | 2025 Maximum 401(k) Plan Contribution Limits & Rules | |||||||||
| Meta Description | 2025 401(k) plan contribution limits increased to $23,500. Catch-up contributions remained at $7,500. View all 401(k) contribution limits from 2007-2025. | |||||||||
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| Boilerpipe Text | In this article:
How Much Can I Contribute to My 401(k) in 2025?
Maximum 401(k) Contribution Limits: 2007-2025
These Contribution Limits Apply to 401(k), 403(b), 457, 401(a) Plans and Thrift Savings Plan
Update:
The IRS announced the 2025 401(k) contribution limits. The employee elective deferral limit increased to $23,500, and the catch-up contributions remained at $7,500 for those who are aged 50 and older.
Investing in your 401(k) plan or other retirement account is one of the easiest and best ways to prepare for retirement. These accounts offer a valuable tax advantage for investors, but there are some limitations. Each year the IRS releases updated 401(k) plan contribution limits. You must pay a tax penalty if you exceed the IRS limit for your age group.
How Much Can I Contribute to My 401(k) in 2025?
The maximum an employee can contribute to their 401(k) plans in 2025 is $23,500. This is a $500 increase from the 2024 tax year.Â
There is also a maximum catch-up contribution of $7,500 that is only available to participants who are at least 50 years old. This amount remains the same as 2023.
The IRS also increased the 2025 total contribution limit by $1,000 to $70,000. This limit includes employee contributions, matching contributions, bonuses and other deferred compensation. If you are at least 50 years old, you can add your catch-up contributions to this total, bringing the 2025 maximum to $77,500.
Let’s look at all these numbers in more detail and discuss what they mean for investors.
The following chart lists the maximum 401(k) plan contribution limits and contribution limits from previous years.
Employee Contributions
apply to persons under the age of 50.Â
Catch-up Contributions
apply to people aged 50 and older.
Total Contribution Limit
is the maximum you can apply to your 401(k) plan in any given year if you are under the age of 50. This includes all possible contributions, including employee contributions, employer contributions, profit-sharing and any other allowable contributions.
The final column is the total contribution limit from all sources for those aged 50 or older.
These Contribution Limits Apply to 401(k), 403(b), 457, 401(a) Plans and Thrift Savings Plan
These contribution limits apply to the 401(k) plan, as well as to several
retirement plans
that are written into the tax code, such as the
Thrift Savings Plan
, Roth and Traditional versions of the 401(k) plan and similar employer-sponsored retirement plans. These limits also apply to Individual 401(k) Plans, also known as the Solo 401(k), which is a
small business retirement plan
).
Look into your specific plan, as there may be slight differences in employer contribution rules, profit sharing or other plan-specific topics.
Maximize Your 401(k) Contributions If You Can
If you can maximize your 401(k) contributions, you will be well on your way to setting up a solid retirement fund. There are two easy ways to determine how much to contribute to maximize your 401(k) account this year.
Maximize Your 401(k) Through Fixed Contributions
If your company allows contributions of a flat dollar amount per month or per check, then you can contribute that amount from your paycheck. If you are under age 50, you could contribute up to $1,958.33 per month or $979.17 per check if you are paid bimonthly.
If you are 50 or over, you can contribute up to $2,583.33 per month or $1,291.67 per check if you are paid twice a month.
Remember, these are the numbers to max out your contributions. You can contribute less than that if that works better for your budget.
Maximize Your 401(k) With Percentage-Based Contributions
If your company doesn’t allow you to make a flat-rate contribution, you need to do some math.Â
Divide the maximum you can contribute ($23,500 or $31,000, if you are over 50) by your total salary. This gives you the percentage you should contribute every paycheck.
For example, if you earn $100,000 per year and can contribute up to $23,500 to your 401(k), you will need to contribute 23.5% of your salary ($23,500 / $100,000 = 23.5%) to maximize your contribution.
If you cannot afford to contribute the maximum, try to at least contribute up to your employer’s match, if your employer makes matching contributions.
Employer matches are free money you can put toward your future. Don’t leave these dollars on the table. You should be able to change your 401(k) contribution amount,
your tax withholding
and other payroll deductions through your human resources department.
What If I Contribute Too Much to My 401(k)?
If you exceed the annual contribution limit, you must withdraw the excess by April 15 of the following year or face a 10% early distribution tax, according to the IRS.Â
You may also need to report the withdrawal as income and face other penalties, which may include retirement plan disqualification.
Luckily, many HR offices and 401(k) plans have systems that prevent over-contributions or automatically refund the overage. You shouldn’t owe extra penalties in these cases.
However, those systems only work if you remain employed by the same company for the entire year. Pay special attention to the annual 401(k) contribution limitations if you change jobs during the year.
If you do happen to contribute too much, work with your HR department or 401(k) plan administrator to correct the issue as soon as you notice it. You may also want to consult with a tax professional to determine if there will be any long-term ramifications or if you will owe any additional taxes or penalties.
IRA or 401(k)/TSP? – Which Is Better for Retirement Planning?
Employees with access to 401(k) plan may also be able to contribute to another type of retirement plan, the Individual Retirement Arrangement (IRA).
Where Should You Invest First – IRA or 401(k)?
Should you contribute to your 401(k) plan at the expense of contributing to a
Roth or traditional IRA
? I covered this topic in a previous article,
Where Should You Invest First – IRA or 401(k)/TSP
?
First, make sure you’re contributing enough to your 401(k) or Thrift Savings Plan to maximize employer-matching contributions. Then, try to max out a
Roth IRA
if you are eligible to contribute to one.
This ensures you take advantage of the free money through your employer’s matching contributions while providing you the best of both worlds regarding current and future taxes.
Tax flexibility is an important retirement planning tool
.
If your company doesn’t offer 401(k) matching contributions, you may consider contributing to a Roth IRA first, and then contributing to your 401(k).
Why Contribute to an IRA?
For the most part, IRAs have similar tax rules as 401(k) plans, but they have
different contribution limits
.
IRAs also have a few important benefits. They are more flexible, as you control how and where you invest your money, giving you more freedom and control over your investment types–and, more importantly, investment costs.
Roth IRAs also don’t have required minimum distributions (RMDs), which exist in all 401(k) plans, including the Roth 401(k).
If you can afford to maximize both investments, read up on
how to invest after maxing out your retirement accounts
. You may have options, such as investing through a health savings account, a taxable investment account, peer-to-peer loans, real estate and more.
Managing Your 401(k) With Your Other Investments
Many people manage their investments on their own, without the help of a professional. This includes managing the investments within their 401(k) plans and any outside investments, such as IRAs, taxable investment accounts, etc.
Tools to Help Manage Your 401(k) Plan
There are several online tools to help you get the most out of your defined-contribution plans such as the 401(k), 401(a), 403(b), 457 and Thrift Savings Plan.
Personal Capital is one option. You can learn more in
our Personal Capital Review
, or visit their site for more information.
Blooom is another online 401(k) robo-advisor. Blooom oversees your 401(k) account and analyzes investing opportunities that you may not be aware of.
Blooom can help investors analyze their investment fees; improve their diversification and find the right mix of stocks, bonds and other investments.
More About Robo-Advisors:
Robo-advisors are automated platforms that use algorithms to guide your investment choices or manage your portfolio on your behalf. Learn more about them in our article,
Best Robo-Advisors for Military Members
.
Meet the Author
Ryan Guina is The Military Wallet's founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Tennessee Air...
Read full bio | |||||||||
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# 2025 401(k) Plan Contribution Limits – Maximum You Can Contribute
2025 401(k) plan contribution limits increased to \$23,500. Catch-up contributions remained at \$7,500. View all 401(k) contribution limits from 2007-2025.
Published November 1, 2022 • Updated December 1, 2023


Written by [Ryan Guina](https://themilitarywallet.com/team/ryan/)
Published November 1, 2022, Updated December 1, 2023
**Why trust The Military Wallet?** We’re a veteran-founded resource that has helped millions make strong financial decisions.
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In this article:
- [How Much Can I Contribute to My 401(k) in 2025?](https://themilitarywallet.com/401k-plan-contribution-limits/#h-how-much-can-i-contribute-to-my-401-k-in-2025)
- [Maximum 401(k) Contribution Limits: 2007-2025](https://themilitarywallet.com/401k-plan-contribution-limits/#h-maximum-401-k-contribution-limits-2007-202-5)
- [These Contribution Limits Apply to 401(k), 403(b), 457, 401(a) Plans and Thrift Savings Plan](https://themilitarywallet.com/401k-plan-contribution-limits/#h-these-contribution-limits-apply-to-401-k-403-b-457-401-a-plans-and-thrift-savings-plan)
Show All
**Update:** The IRS announced the 2025 401(k) contribution limits. The employee elective deferral limit increased to \$23,500, and the catch-up contributions remained at \$7,500 for those who are aged 50 and older.
Investing in your 401(k) plan or other retirement account is one of the easiest and best ways to prepare for retirement. These accounts offer a valuable tax advantage for investors, but there are some limitations. Each year the IRS releases updated 401(k) plan contribution limits. You must pay a tax penalty if you exceed the IRS limit for your age group.
## **How Much Can I Contribute to My 401(k) in 2025?**
The maximum an employee can contribute to their 401(k) plans in 2025 is \$23,500. This is a \$500 increase from the 2024 tax year.
There is also a maximum catch-up contribution of \$7,500 that is only available to participants who are at least 50 years old. This amount remains the same as 2023.
The IRS also increased the 2025 total contribution limit by \$1,000 to \$70,000. This limit includes employee contributions, matching contributions, bonuses and other deferred compensation. If you are at least 50 years old, you can add your catch-up contributions to this total, bringing the 2025 maximum to \$77,500.
Let’s look at all these numbers in more detail and discuss what they mean for investors.
## **Maximum 401(k) Contribution Limits: 2007-202**5
The following chart lists the maximum 401(k) plan contribution limits and contribution limits from previous years.
**Employee Contributions** apply to persons under the age of 50.
**Catch-up Contributions** apply to people aged 50 and older.
**Total Contribution Limit** is the maximum you can apply to your 401(k) plan in any given year if you are under the age of 50. This includes all possible contributions, including employee contributions, employer contributions, profit-sharing and any other allowable contributions.
The final column is the total contribution limit from all sources for those aged 50 or older.
| Year | Employee Contributions | Catch-Up Contributions (Age 50+) | Total Contribution Limit | Total Contribution Limit With Catch-Up |
|---|---|---|---|---|
| 2025 | \$23,500 | \$7,500 | \$70,000 | \$77,500 |
| 2024 | \$23,000 | \$7,500 | \$69,000 | \$76,500 |
| 2023 | \$22,500 | \$7,500 | \$66,000 | \$73,500 |
| 2022 | \$20,500 | \$6,500 | \$61,000 | \$67,500 |
| 2021 | \$19,500 | \$6,500 | \$58,000 | \$64,500 |
| 2020 | \$19,500 | \$6,500 | \$57,000 | \$63,500 |
| 2019 | \$19,000 | \$6,000 | \$56,000 | \$62,000 |
| 2018 | \$18,500 | \$6,000 | \$55,000 | \$61,000 |
| 2017 | \$18,000 | \$6,000 | \$54,000 | \$60,000 |
| 2016 | \$18,000 | \$6,000 | \$53,000 | \$59,000 |
| 2015 | \$18,000 | \$6,000 | \$53,000 | \$59,000 |
| 2014 | \$17,500 | \$5,500 | \$52,000 | \$57,500 |
| 2013 | \$17,500 | \$5,500 | \$51,000 | \$56,500 |
| 2012 | \$17,000 | \$5,500 | \$50,000 | \$55,500 |
| 2001 | \$16,500 | \$5,500 | \$49,000 | \$54,500 |
| 2010 | \$16,500 | \$5,500 | \$49,000 | \$54,500 |
| 2009 | \$16,500 | \$5,500 | \$49,000 | \$54,500 |
| 2008 | \$15,500 | \$5,000 | \$46,000 | \$51,000 |
| 2007 | \$15,500 | \$5,000 | \$46,000 | \$51,000 |
## **These Contribution Limits Apply to 401(k), 403(b), 457, 401(a) Plans and Thrift Savings Plan**
These contribution limits apply to the 401(k) plan, as well as to several [retirement plans](https://themilitarywallet.com/retirement-accounts/) that are written into the tax code, such as the [Thrift Savings Plan](https://themilitarywallet.com/thrift-savings-plan-contribution-limits/), Roth and Traditional versions of the 401(k) plan and similar employer-sponsored retirement plans. These limits also apply to Individual 401(k) Plans, also known as the Solo 401(k), which is a [small business retirement plan](https://www.irs.gov/retirement-plans/plan-sponsor/types-of-retirement-plans)).
Look into your specific plan, as there may be slight differences in employer contribution rules, profit sharing or other plan-specific topics.
## **Maximize Your 401(k) Contributions If You Can**
If you can maximize your 401(k) contributions, you will be well on your way to setting up a solid retirement fund. There are two easy ways to determine how much to contribute to maximize your 401(k) account this year.
### **Maximize Your 401(k) Through Fixed Contributions**
If your company allows contributions of a flat dollar amount per month or per check, then you can contribute that amount from your paycheck. If you are under age 50, you could contribute up to \$1,958.33 per month or \$979.17 per check if you are paid bimonthly.
If you are 50 or over, you can contribute up to \$2,583.33 per month or \$1,291.67 per check if you are paid twice a month.
Remember, these are the numbers to max out your contributions. You can contribute less than that if that works better for your budget.
### **Maximize Your 401(k) With Percentage-Based Contributions**
If your company doesn’t allow you to make a flat-rate contribution, you need to do some math.
Divide the maximum you can contribute (\$23,500 or \$31,000, if you are over 50) by your total salary. This gives you the percentage you should contribute every paycheck.
For example, if you earn \$100,000 per year and can contribute up to \$23,500 to your 401(k), you will need to contribute 23.5% of your salary (\$23,500 / \$100,000 = 23.5%) to maximize your contribution.
If you cannot afford to contribute the maximum, try to at least contribute up to your employer’s match, if your employer makes matching contributions.
Employer matches are free money you can put toward your future. Don’t leave these dollars on the table. You should be able to change your 401(k) contribution amount, [your tax withholding](https://themilitarywallet.com/how-to-adjust-tax-withholding/) and other payroll deductions through your human resources department.
### **What If I Contribute Too Much to My 401(k)?**
If you exceed the annual contribution limit, you must withdraw the excess by April 15 of the following year or face a 10% early distribution tax, according to the IRS.
You may also need to report the withdrawal as income and face other penalties, which may include retirement plan disqualification.
Luckily, many HR offices and 401(k) plans have systems that prevent over-contributions or automatically refund the overage. You shouldn’t owe extra penalties in these cases.
However, those systems only work if you remain employed by the same company for the entire year. Pay special attention to the annual 401(k) contribution limitations if you change jobs during the year.
If you do happen to contribute too much, work with your HR department or 401(k) plan administrator to correct the issue as soon as you notice it. You may also want to consult with a tax professional to determine if there will be any long-term ramifications or if you will owe any additional taxes or penalties.
## IRA or 401(k)/TSP? – Which Is Better for Retirement Planning?
Employees with access to 401(k) plan may also be able to contribute to another type of retirement plan, the Individual Retirement Arrangement (IRA).
### Where Should You Invest First – IRA or 401(k)?
Should you contribute to your 401(k) plan at the expense of contributing to a [Roth or traditional IRA](https://themilitarywallet.com/choosing-between-a-roth-ira-and-a-traditional-ira/)? I covered this topic in a previous article, [Where Should You Invest First – IRA or 401(k)/TSP](https://themilitarywallet.com/tsp-or-ira/)?
First, make sure you’re contributing enough to your 401(k) or Thrift Savings Plan to maximize employer-matching contributions. Then, try to max out a [Roth IRA](https://themilitarywallet.com/where-to-open-a-roth-ira-account/) if you are eligible to contribute to one.
This ensures you take advantage of the free money through your employer’s matching contributions while providing you the best of both worlds regarding current and future taxes. [Tax flexibility is an important retirement planning tool](https://themilitarywallet.com/retirement-accounts/).
If your company doesn’t offer 401(k) matching contributions, you may consider contributing to a Roth IRA first, and then contributing to your 401(k).
### Why Contribute to an IRA?
For the most part, IRAs have similar tax rules as 401(k) plans, but they have [different contribution limits](https://themilitarywallet.com/traditional-and-roth-ira-contribution-limits/).
IRAs also have a few important benefits. They are more flexible, as you control how and where you invest your money, giving you more freedom and control over your investment types–and, more importantly, investment costs.
Roth IRAs also don’t have required minimum distributions (RMDs), which exist in all 401(k) plans, including the Roth 401(k).
If you can afford to maximize both investments, read up on [how to invest after maxing out your retirement accounts](https://themilitarywallet.com/retirement-investment-strategies-after-maxing-out-401k-ira/). You may have options, such as investing through a health savings account, a taxable investment account, peer-to-peer loans, real estate and more.
## **Managing Your 401(k) With Your Other Investments**
Many people manage their investments on their own, without the help of a professional. This includes managing the investments within their 401(k) plans and any outside investments, such as IRAs, taxable investment accounts, etc.
### **Tools to Help Manage Your 401(k) Plan**
There are several online tools to help you get the most out of your defined-contribution plans such as the 401(k), 401(a), 403(b), 457 and Thrift Savings Plan.
Personal Capital is one option. You can learn more in [our Personal Capital Review](https://themilitarywallet.com/personal-capital-review/), or visit their site for more information.
Blooom is another online 401(k) robo-advisor. Blooom oversees your 401(k) account and analyzes investing opportunities that you may not be aware of.
Blooom can help investors analyze their investment fees; improve their diversification and find the right mix of stocks, bonds and other investments.
**More About Robo-Advisors:** Robo-advisors are automated platforms that use algorithms to guide your investment choices or manage your portfolio on your behalf. Learn more about them in our article, [Best Robo-Advisors for Military Members](https://themilitarywallet.com/robo-advisors/).
Meet the Author

[Ryan Guina](https://themilitarywallet.com/team/ryan/)
Ryan Guina is The Military Wallet's founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Tennessee Air...
[Read full bio](https://themilitarywallet.com/team/ryan/)
In this article:
- [How Much Can I Contribute to My 401(k) in 2025?](https://themilitarywallet.com/401k-plan-contribution-limits/#h-how-much-can-i-contribute-to-my-401-k-in-2025)
- [Maximum 401(k) Contribution Limits: 2007-2025](https://themilitarywallet.com/401k-plan-contribution-limits/#h-maximum-401-k-contribution-limits-2007-202-5)
- [These Contribution Limits Apply to 401(k), 403(b), 457, 401(a) Plans and Thrift Savings Plan](https://themilitarywallet.com/401k-plan-contribution-limits/#h-these-contribution-limits-apply-to-401-k-403-b-457-401-a-plans-and-thrift-savings-plan)
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[ Investing & Retirement April 14, 2026 6 min read Why Military Members Should Open Roth IRAs Why Military Members Should Open Roth IRAs](https://themilitarywallet.com/military-members-should-open-roth-ira/)
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| Readable Markdown | In this article:
- [How Much Can I Contribute to My 401(k) in 2025?](https://themilitarywallet.com/401k-plan-contribution-limits/#h-how-much-can-i-contribute-to-my-401-k-in-2025)
- [Maximum 401(k) Contribution Limits: 2007-2025](https://themilitarywallet.com/401k-plan-contribution-limits/#h-maximum-401-k-contribution-limits-2007-202-5)
- [These Contribution Limits Apply to 401(k), 403(b), 457, 401(a) Plans and Thrift Savings Plan](https://themilitarywallet.com/401k-plan-contribution-limits/#h-these-contribution-limits-apply-to-401-k-403-b-457-401-a-plans-and-thrift-savings-plan)
**Update:** The IRS announced the 2025 401(k) contribution limits. The employee elective deferral limit increased to \$23,500, and the catch-up contributions remained at \$7,500 for those who are aged 50 and older.
Investing in your 401(k) plan or other retirement account is one of the easiest and best ways to prepare for retirement. These accounts offer a valuable tax advantage for investors, but there are some limitations. Each year the IRS releases updated 401(k) plan contribution limits. You must pay a tax penalty if you exceed the IRS limit for your age group.
## **How Much Can I Contribute to My 401(k) in 2025?**
The maximum an employee can contribute to their 401(k) plans in 2025 is \$23,500. This is a \$500 increase from the 2024 tax year.
There is also a maximum catch-up contribution of \$7,500 that is only available to participants who are at least 50 years old. This amount remains the same as 2023.
The IRS also increased the 2025 total contribution limit by \$1,000 to \$70,000. This limit includes employee contributions, matching contributions, bonuses and other deferred compensation. If you are at least 50 years old, you can add your catch-up contributions to this total, bringing the 2025 maximum to \$77,500.
Let’s look at all these numbers in more detail and discuss what they mean for investors.
The following chart lists the maximum 401(k) plan contribution limits and contribution limits from previous years.
**Employee Contributions** apply to persons under the age of 50.
**Catch-up Contributions** apply to people aged 50 and older.
**Total Contribution Limit** is the maximum you can apply to your 401(k) plan in any given year if you are under the age of 50. This includes all possible contributions, including employee contributions, employer contributions, profit-sharing and any other allowable contributions.
The final column is the total contribution limit from all sources for those aged 50 or older.
## **These Contribution Limits Apply to 401(k), 403(b), 457, 401(a) Plans and Thrift Savings Plan**
These contribution limits apply to the 401(k) plan, as well as to several [retirement plans](https://themilitarywallet.com/retirement-accounts/) that are written into the tax code, such as the [Thrift Savings Plan](https://themilitarywallet.com/thrift-savings-plan-contribution-limits/), Roth and Traditional versions of the 401(k) plan and similar employer-sponsored retirement plans. These limits also apply to Individual 401(k) Plans, also known as the Solo 401(k), which is a [small business retirement plan](https://www.irs.gov/retirement-plans/plan-sponsor/types-of-retirement-plans)).
Look into your specific plan, as there may be slight differences in employer contribution rules, profit sharing or other plan-specific topics.
## **Maximize Your 401(k) Contributions If You Can**
If you can maximize your 401(k) contributions, you will be well on your way to setting up a solid retirement fund. There are two easy ways to determine how much to contribute to maximize your 401(k) account this year.
### **Maximize Your 401(k) Through Fixed Contributions**
If your company allows contributions of a flat dollar amount per month or per check, then you can contribute that amount from your paycheck. If you are under age 50, you could contribute up to \$1,958.33 per month or \$979.17 per check if you are paid bimonthly.
If you are 50 or over, you can contribute up to \$2,583.33 per month or \$1,291.67 per check if you are paid twice a month.
Remember, these are the numbers to max out your contributions. You can contribute less than that if that works better for your budget.
### **Maximize Your 401(k) With Percentage-Based Contributions**
If your company doesn’t allow you to make a flat-rate contribution, you need to do some math.
Divide the maximum you can contribute (\$23,500 or \$31,000, if you are over 50) by your total salary. This gives you the percentage you should contribute every paycheck.
For example, if you earn \$100,000 per year and can contribute up to \$23,500 to your 401(k), you will need to contribute 23.5% of your salary (\$23,500 / \$100,000 = 23.5%) to maximize your contribution.
If you cannot afford to contribute the maximum, try to at least contribute up to your employer’s match, if your employer makes matching contributions.
Employer matches are free money you can put toward your future. Don’t leave these dollars on the table. You should be able to change your 401(k) contribution amount, [your tax withholding](https://themilitarywallet.com/how-to-adjust-tax-withholding/) and other payroll deductions through your human resources department.
### **What If I Contribute Too Much to My 401(k)?**
If you exceed the annual contribution limit, you must withdraw the excess by April 15 of the following year or face a 10% early distribution tax, according to the IRS.
You may also need to report the withdrawal as income and face other penalties, which may include retirement plan disqualification.
Luckily, many HR offices and 401(k) plans have systems that prevent over-contributions or automatically refund the overage. You shouldn’t owe extra penalties in these cases.
However, those systems only work if you remain employed by the same company for the entire year. Pay special attention to the annual 401(k) contribution limitations if you change jobs during the year.
If you do happen to contribute too much, work with your HR department or 401(k) plan administrator to correct the issue as soon as you notice it. You may also want to consult with a tax professional to determine if there will be any long-term ramifications or if you will owe any additional taxes or penalties.
## IRA or 401(k)/TSP? – Which Is Better for Retirement Planning?
Employees with access to 401(k) plan may also be able to contribute to another type of retirement plan, the Individual Retirement Arrangement (IRA).
### Where Should You Invest First – IRA or 401(k)?
Should you contribute to your 401(k) plan at the expense of contributing to a [Roth or traditional IRA](https://themilitarywallet.com/choosing-between-a-roth-ira-and-a-traditional-ira/)? I covered this topic in a previous article, [Where Should You Invest First – IRA or 401(k)/TSP](https://themilitarywallet.com/tsp-or-ira/)?
First, make sure you’re contributing enough to your 401(k) or Thrift Savings Plan to maximize employer-matching contributions. Then, try to max out a [Roth IRA](https://themilitarywallet.com/where-to-open-a-roth-ira-account/) if you are eligible to contribute to one.
This ensures you take advantage of the free money through your employer’s matching contributions while providing you the best of both worlds regarding current and future taxes. [Tax flexibility is an important retirement planning tool](https://themilitarywallet.com/retirement-accounts/).
If your company doesn’t offer 401(k) matching contributions, you may consider contributing to a Roth IRA first, and then contributing to your 401(k).
### Why Contribute to an IRA?
For the most part, IRAs have similar tax rules as 401(k) plans, but they have [different contribution limits](https://themilitarywallet.com/traditional-and-roth-ira-contribution-limits/).
IRAs also have a few important benefits. They are more flexible, as you control how and where you invest your money, giving you more freedom and control over your investment types–and, more importantly, investment costs.
Roth IRAs also don’t have required minimum distributions (RMDs), which exist in all 401(k) plans, including the Roth 401(k).
If you can afford to maximize both investments, read up on [how to invest after maxing out your retirement accounts](https://themilitarywallet.com/retirement-investment-strategies-after-maxing-out-401k-ira/). You may have options, such as investing through a health savings account, a taxable investment account, peer-to-peer loans, real estate and more.
## **Managing Your 401(k) With Your Other Investments**
Many people manage their investments on their own, without the help of a professional. This includes managing the investments within their 401(k) plans and any outside investments, such as IRAs, taxable investment accounts, etc.
### **Tools to Help Manage Your 401(k) Plan**
There are several online tools to help you get the most out of your defined-contribution plans such as the 401(k), 401(a), 403(b), 457 and Thrift Savings Plan.
Personal Capital is one option. You can learn more in [our Personal Capital Review](https://themilitarywallet.com/personal-capital-review/), or visit their site for more information.
Blooom is another online 401(k) robo-advisor. Blooom oversees your 401(k) account and analyzes investing opportunities that you may not be aware of.
Blooom can help investors analyze their investment fees; improve their diversification and find the right mix of stocks, bonds and other investments.
**More About Robo-Advisors:** Robo-advisors are automated platforms that use algorithms to guide your investment choices or manage your portfolio on your behalf. Learn more about them in our article, [Best Robo-Advisors for Military Members](https://themilitarywallet.com/robo-advisors/).
Meet the Author

Ryan Guina is The Military Wallet's founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Tennessee Air...
[Read full bio](https://themilitarywallet.com/team/ryan/) | |||||||||
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