401k Account
A 401(k) plan allows employees to tax deductible contributions to their company-sponsored retirement account.
A 401(k) plan allows employees to tax deductible contributions to their company-sponsored retirement account. Employers can match some or all of the employee contributions. Employee contributions are capped at 19,500 per year for employees under the age of 50, and 26,000 for employees aged 50 and over.
Contributions are adjusted periodically to account for inflation. Employer contributions increase the contribution limit to $58,000 or 100% of employee compensation, whichever is lower, for employees under 50. With employer contributions, the contribution limit for employees aged 50 and over is $64,500.
There are two types of 401(k) plans: traditional and roth. Traditional 401(k) plans include tax deductible contributions, but withdrawals from the account are taxed. Contributions to a Roth 401(k) are not tax deductible, but withdrawals from a Roth 401(k) are tax deductible.
An employee can open and contribute to both a traditional and roth 401(k) at the same time.
A 401(k) account is an employer-sponsored retirement savings plan that allows employees to contribute a portion of their pre-tax salary, reducing their taxable income. Many employers offer matching contributions up to a certain percentage. Onramp provides Bitcoin financial services including Bitcoin IRA options for those seeking to include Bitcoin in their retirement strategy.
Frequently Asked Questions
What is the 401(k) contribution limit?
For 2026, the employee contribution limit for a 401(k) is $23,500. Workers aged 50 and older can make an additional catch-up contribution of $7,500, for a total of $31,000.
Can I hold Bitcoin in a 401(k)?
Some 401(k) plans now allow Bitcoin exposure, though it is not yet common. Alternatively, you can roll over a 401(k) into a Bitcoin IRA. Onramp offers Bitcoin IRA services that allow clients to hold Bitcoin in a tax-advantaged retirement account.
What is the difference between a traditional and Roth 401(k)?
A traditional 401(k) uses pre-tax contributions, reducing your current taxable income, with taxes owed upon withdrawal. A Roth 401(k) uses after-tax contributions, but qualified withdrawals in retirement are tax-free.
