What is the last date to invest in 401(k)?
1 min read
Unlike individual retirement accounts (IRAs), which allow you to contribute until the tax filing deadline of the following year, 401(k) plans have a different deadline.
The 401(k) contributions deadline is December 31 of each year. This means you must make your contributions through payroll deductions by the end of the calendar year. This applies to traditional and Roth 401(k) and 403(b) plans for nonprofit and government employees.
This deadline is because 401(k) plans are funded with pre-tax dollars, which means your contributions reduce your annual taxable income. If you contribute after December 31, you cannot claim the tax deduction for that year.
However, there is an exception for self-employed individuals with a solo 401(k) plan. They can make contributions as late as the tax filing deadline of their business, including any extensions. This gives them more flexibility and time to fund their retirement plan.