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Retirement plans: Can you contribute to more than one 401(k)?

When saving for retirement there are several options to choose from like 401(k) plans. But what happens if you have two or more? Can you put money in both?

Rules on having more than one 401(k) plan

Americans have several options when planning for retirement. One of the most common is 401(k) plans either through your employer or that you can set up for yourself. The plans come in different forms and different rules apply to each one.

The good news is that you don’t have to keep all your eggs in one basket. You can have multiple accounts, including other types of retirement accounts like Individual Retirement Accounts (IRAs), all of which you can also pay into at the same time.

However, there are limits to the total amount for how much you can tuck away each year as well as your employer. The IRS will look at the aggregate of your contributions across your different retirement plans each year.

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Can you contribute to more than one 401(k)? Contribution limits for 2023

Every year the Internal Revenue Service updates the amount of money that contributors can put into their IRA and/or 401(k) accounts. The limits are put in place to avoid people using them as a way of evading taxes.

Due to high inflation in 2022, the contribution limits for 401(k) jumped nearly 10 percent for contributions in 2023. Retirement savers will be able to inject an additional $2,000 next year for a maximum tax deferral amount of $22,500 for 401(k)s, 403(b)s, most 457 plans, and Thrift Savings Plan.

Depending on their situation, individuals may put more into their 401(k) with a total annual contribution cap to all of your accounts of $66,000, or $73,500 for those who can make catch-up contributions, an increase of $5,000 over the 2022 limits.

Those who are above the age of 50 are also eligible for catch-up contributions above the $22,500 cap. Instead of the $6,500 limit in 2022, employees above age 50 can put an additional $7,500 into their 401(k) for a total contribution of $30,000. However, the catch-up contributions for traditional or Roth IRAs is unchanged for 2023.

Increase to IRA and Roth IRA contribution limits for 2023

Both traditional IRA and Roth IRA annual contribution limits have increased as well for 2023 by $500 for a maximum of $6,500. The additional catch-up contribution, again for savers above age 50, is $1,000, the same as it was for 2022.

These limits are reduced for individuals whose income surpasses certain income thresholds which are different for those who have an employer retirement account, or their spouse does, and those who neither they nor their spouse do. Those who exceed the upper limit of the phase out threshold are not eligible for the tax benefits.


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