What is a 401K?

A 401(k) plan is the most common type of employer-sponsored retirement plan in America. Millions of workers depend on the money that they have saved in this plan to provide for their retirement years. A 401(k) plan is defined as a pretax saving plan done through percentage payroll deductions. The amount of money you can contribute is determine by the IRS.

The 401(k) contribution limit was increased from $20,500 to $22,500 for the calendar year 2023. In the same calendar year any worker turns age 50, they can contribute an additional $7,500 into their 401(k) retirement plan. EXAMPLE: If an employee turning age 50 in 2023 chooses to, they can contribute the additional amount, to get a total of $30,000.00.

To review your 401(k), please go to www.principal.com/individuals.