Maximum Employer Contribution to Defined Contribution Plans

Course: Retirement Planning
Lesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners

Student Question:

Hello,

If I understand correctly, the maximum an employer can contribute to a defined contribution plan is $58k over the life of the individual’s plan?

Austin

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Instructor Response:

Hi Austin,

You are directionally correct. The maximum annual employer contribution to a participant’s defined contribution category plan account is the lesser of an annually indexed amount ($58,000 for 2021) or the individual’s compensation.

How completely does this address your question?

Onward and Upward,

Bruce

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