Many employers supply a 401(okay) plan, a retirement financial savings account that permits workers to save cash on a tax-advantaged foundation. One query that usually arises is whether or not employer matching contributions depend in direction of the annual 401(okay) contribution restrict.
The reply to this query is sure, employer matching contributions do depend in direction of the annual 401(okay) contribution restrict. Which means that the entire sum of money that an worker can contribute to their 401(okay) plan every year is lowered by the quantity of any matching contributions made by their employer. For instance, if an worker has a 401(okay) plan with a $19,500 annual contribution restrict and their employer matches 50% of their contributions as much as 6%, the worker can solely contribute $14,625 to their 401(okay) plan every year.
