The 401(k) started showing up after the Revenue Act of 1978. Took a few years before it really caught on, but that’s where it began. Since then, the annual contribution limits have been adjusted almost every year. Sometimes they go up, sometimes they stay flat, depending on inflation or what Congress decides at the time.
Below is a breakdown of those limits over the years. It shows how much employees were allowed to put in, along with the catch-up amount that began in 2002 for people age 50 and older. It also includes the total contribution cap when you count in what the employer can add. CPI figures are included as well, since the IRS uses those to decide whether a change is needed. Some years there was barely enough inflation to justify an increase. Other years saw a more noticeable bump. Overall, it’s been a slow, uneven climb. Still, probably worth keeping an eye on.
Historical 401(k) Contribution Limits with CPI % Change and Annualized Increases (1978–2024)
| Year | Employee Contribution Limit | Catch-Up Contribution | Total Contribution Limit | CPI % Change | Increase % (Employee Limit) | Annualized CPI Increase (1986–Year) | Annualized Limit Increase (1986–Year) |
|---|---|---|---|---|---|---|---|
| 1978 | $45,475* | $0 | N/A | 7.59% | N/A (First year) | N/A | N/A |
| 1979 | $45,475* | $0 | N/A | 11.35% | 0% | N/A | N/A |
| 1980 | $45,475* | $0 | N/A | 13.50% | 0% | N/A | N/A |
| 1981 | $45,475* | $0 | N/A | 10.33% | 0% | N/A | N/A |
| 1982 | $30,000** | $0 | $30,000 | 6.16% | -34.0% | N/A | N/A |
| 1983 | $30,000 | $0 | $30,000 | 3.21% | 0% | N/A | N/A |
| 1984 | $30,000 | $0 | $30,000 | 4.32% | 0% | N/A | N/A |
| 1985 | $30,000 | $0 | $30,000 | 3.56% | 0% | N/A | N/A |
| 1986 | $7,000*** | $0 | $30,000 | 1.86% | -76.7% | N/A | N/A |
| 1987 | $7,313 | $0 | $30,000 | 3.65% | 4.5% | 3.65% | 4.47% |
| 1988 | $7,627 | $0 | $30,000 | 4.14% | 4.3% | 3.90% | 4.31% |
| 1989 | $7,979 | $0 | $30,000 | 4.82% | 4.6% | 4.20% | 4.40% |
| 1990 | $8,475 | $0 | $30,000 | 5.40% | 6.2% | 4.50% | 4.88% |
| 1991 | $8,994 | $0 | $30,000 | 4.21% | 6.1% | 4.44% | 5.13% |
| 1992 | $9,240 | $0 | $30,000 | 3.01% | 2.7% | 4.20% | 4.76% |
| 1993 | $9,500 | $0 | $30,000 | 2.99% | 2.8% | 4.01% | 4.47% |
| 1994 | $9,240 | $0 | $30,000 | 2.56% | -2.7% | 3.83% | 3.54% |
| 1995 | $9,240 | $0 | $30,000 | 2.83% | 0% | 3.71% | 3.10% |
| 1996 | $9,500 | $0 | $30,000 | 2.95% | 2.8% | 3.62% | 3.09% |
| 1997 | $9,500 | $0 | $30,000 | 2.29% | 0% | 3.49% | 2.82% |
| 1998 | $10,000 | $0 | $30,000 | 1.56% | 5.3% | 3.31% | 2.94% |
| 1999 | $10,000 | $0 | $30,000 | 2.21% | 0% | 3.22% | 2.73% |
| 2000 | $10,500 | $0 | $30,000 | 3.36% | 5.0% | 3.22% | 2.85% |
| 2001 | $10,500 | $0 | $35,000 | 2.85% | 0% | 3.17% | 2.66% |
| 2002 | $11,000 | $1,000 | $40,000 | 1.58% | 4.8% | 3.06% | 2.73% |
| 2003 | $12,000 | $2,000 | $40,000 | 2.28% | 9.1% | 3.01% | 3.02% |
| 2004 | $13,000 | $3,000 | $41,000 | 2.66% | 8.3% | 2.98% | 3.29% |
| 2005 | $14,000 | $4,000 | $42,000 | 3.39% | 7.7% | 3.00% | 3.54% |
| 2006 | $15,000 | $5,000 | $44,000 | 3.24% | 7.1% | 3.02% | 3.76% |
| 2007 | $15,500 | $5,000 | $45,500 | 2.85% | 3.3% | 3.01% | 3.78% |
| 2008 | $15,500 | $5,000 | $46,000 | 3.84% | 0% | 3.06% | 3.61% |
| 2009 | $16,500 | $5,500 | $49,000 | -0.36% | 6.5% | 2.93% | 3.75% |
| 2010 | $16,500 | $5,500 | $49,000 | 1.64% | 0% | 2.87% | 3.60% |
| 2011 | $16,500 | $5,500 | $49,000 | 3.16% | 0% | 2.88% | 3.46% |
| 2012 | $17,000 | $5,500 | $50,000 | 2.07% | 3.0% | 2.86% | 3.43% |
| 2013 | $17,500 | $5,500 | $51,000 | 1.46% | 2.9% | 2.82% | 3.41% |
| 2014 | $17,500 | $5,500 | $52,000 | 1.62% | 0% | 2.79% | 3.30% |
| 2015 | $18,000 | $6,000 | $53,000 | 0.12% | 2.9% | 2.72% | 3.29% |
| 2016 | $18,000 | $6,000 | $53,000 | 1.26% | 0% | 2.68% | 3.20% |
| 2017 | $18,000 | $6,000 | $54,000 | 2.13% | 0% | 2.67% | 3.12% |
| 2018 | $18,500 | $6,000 | $55,000 | 2.44% | 2.8% | 2.67% | 3.12% |
| 2019 | $19,000 | $6,000 | $56,000 | 1.76% | 2.7% | 2.64% | 3.13% |
| 2020 | $19,500 | $6,500 | $57,000 | 1.23% | 2.6% | 2.61% | 3.14% |
| 2021 | $19,500 | $6,500 | $58,000 | 4.70% | 0% | 2.66% | 3.06% |
| 2022 | $20,500 | $6,500 | $61,000 | 8.00% | 5.1% | 2.77% | 3.12% |
| 2023 | $22,500 | $7,500 | $66,000 | 4.12% | 9.8% | 2.81% | 3.26% |
| 2024 | $23,000 | $7,500 | $69,000 ($76,500 with catch-up) | 3.08% | 2.2% | 2.83% | 3.20% |
Note: in the above data, the Annualized Limit Increase is for Employee contribution limit increase, not the overall employee and employer match increase.
Observations
- From 1978 to 1985, the annual contribution limits were very high and they actually include both employee and employer contributions.
- However, in 1986, the Reagan Administration and the congress drastically reduced the employee annual contribution to $7,000. This was the real starting basis.
- Since 1986 to 2024, the annual CPI (inflation) change is 2.83% while the annual contribution annual change is 3.2%. So the congress has made some efforts to allow tax-deferred retirement savings to increase faster than inflation. However, the increase has not been consistent. Some years we saw 0 increase.
- The catch up contribution was introduced in 2002.
We also want to comment that the annual contribution limit includes Roth 401(k) also.