Roth 401(k) Contribution Limits

Key facts

  • A Roth 401(k) is similar to a traditional 401(k) except that it requires you to pay taxes on contributions and does not require you to pay taxes on qualified withdrawals.
  • The current annual contribution limit is $19,500.
  • You can contribute to a traditional and a Roth 401(k) and split the contributions in whatever way you wish, as long as the total amount is below the aggregate maximum contribution limit.

A Roth 401(k) is an employer-sponsored retirement savings account that is funded with after-tax money. Because you’ve already paid taxes on the contributions, you do not need to pay any taxes on the distributions if certain conditions are met.

What is a Roth 401(k)?

A Roth 401(k) works in a similar fashion to a traditional employer-sponsored 401(k). The only difference is that with a Roth 401(k), contributions are made after your employer withholds taxes. Since you’ve already paid taxes on the contributions, you are not required to pay taxes on withdrawals provided they are qualified distributions.

A withdrawal is considered a qualified distribution if you have held the account for at least five years and the funds are withdrawn:

  • When you are aged 59½ years or older
  • On account of disability
  • On or after death

Who’s Eligible to Contribute to a Roth 401(k)?

Anyone can make Roth contributions as soon as they’re eligible to participate in the company plan. There are no income limits as there are with a Roth IRA, so even higher earners can participate.

Employers are not required to offer Roth 401(k)s, however, and not all of them do. During your next open enrollment period, it may be a good idea to inquire whether your company offers a Roth option.

What is the Maximum Contribution Limit?

The current maximum amount you can contribute to your Roth 401(k) is $19,500, plus an additional $6,500 for employees aged 50 or over if the company plan permits catch-up contributions. This is an after-tax contribution, which means you will not be able to deduct contributions from your taxable income. Keep in mind that the maximum contribution is an aggregate limit across all of your 401(k) plans; you cannot save $19,500 in a traditional 401(k) and another $19,500 in a Roth 401(k).

What about Employer Contributions?

Employers are not obligated to match your Roth contributions, but if they do, the match is a pre-tax contribution. The funds will go into a separate pre-tax account, and funds from it will be subject to tax when distributions are made at retirement.

Your employer’s contribution does not count towards your individual maximum permitted contribution, but they do count towards the overall limit. Currently, the maximum amount that you can put into all your 401(k) plans, Roth or traditional and including employer contribution, is $57,000 for individuals under 50 or $63,500 for those aged 50 and over.

Can I Contribute to Both a Roth 401(k) and a Traditional 401(k)?

You can. Depending on your personal situation, it may be smart to contribute to both a Roth 401(k) and a traditional plan, allowing you to diversify your tax strategy. If you participate in both types of plan, you can split your contribution any way you wish up to the maximum contribution limit. For example, you could defer $9,000 into your Roth 401(k) and $10,500 into a pre-tax 401(k) plan.


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This article is not intended as tax advice, and Wealthfront does not represent in any manner that the outcomes described herein will result in any particular tax consequence. Prospective investors should confer with their personal tax advisors regarding the tax consequences based on their particular circumstances. Wealthfront assumes no responsibility for the tax consequences to any investor of any transaction. Investors and their personal tax advisors are responsible for how the transactions in an account are reported to the IRS or any other taxing authority.