Maxing out a 401(k) plan is a pretty tall order. Currently, 401(k)s max out at $23,000 for workers under 50, while those 50 and over get a $7,500 catch-up option that brings their total allowable contribution for 2024 to $30,500.

In 2025, these limits are rising by $500. Or, more accurately, the contribution limit for workers under 50 is increasing by $500, while the $7,500 catch-up contribution is staying the same.

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So in the new year, workers under 50 will be allowed to put in a total of $23,500. And those 50 and older will be able to contribute a maximum of $31,000.

You may not necessarily be in a position where you can max out your 401(k) in 2024. But you may be able to save more in your employer’s retirement plan than what you’ve contributed to date and are on track to contribute through the end of the year.

But if you want to increase your 401(k) plan contribution for 2024, it’s important to act now. If you wait too long, you might miss out.

Don’t miss the deadline

The nice thing about IRAs is that you have until the following year’s tax-filing deadline to make contributions. But you don’t have until next April to finish funding your 401(k) for 2024.

If you want your contributions to count for 2024 tax purposes, then your money needs to hit your account by December 31 of this year. So if you know you can afford to increase your savings rate, the time to tell your employer is now.

Unlike IRAs, which you can fund by transferring money over from a bank account, 401(k) plans are funded via payroll deductions. This means that someone in your company has to go in and process a change to how you’re being paid.

If you wait until late November or December to make that decision, the right person to handle that task may be out on vacation because of the holidays. Or, they may be backed up with other pressing items to handle.

Plus, depending on your company’s payroll software, it might take a pay cycle or two to implement a change to your 401(k) savings rate. So it’s important to fill out the right paperwork during the first half of November. If you wait beyond that point, you may not be able to sneak more money into your 401(k) like you want to.

Don’t lose out on a workplace match

It’s especially important to increase your 401(k) contributions ASAP if you’re not on track to snag your complete employer match for the year. If you give up any portion of that match, you’re leaving free money on the table. And that could hurt you more than expected.

Remember, any money your employer contributes to your 401(k) is money you can invest. If your 401(k) typically generates an average annual 8% return, which is a bit below the stock market’s average return, then missing out on $1,000 in employer matching dollars today could lead to a savings shortfall of more like $15,000 in 35 years.

Even if you can’t max out your 401(k) for 2024, it pays to try to get as close as possible. The more money you sock away today, the larger a nest egg you stand to retire with.

But don’t wait to make changes to your 401(k) contribution rate. Check that task off your list during the first half of November so you can rest assured that it’s taken care of.

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