• An elective deferral is a portion of an employee’s salary that is withheld and transferred to a retirement plan such as a 401(k).
  • Selective deferrals may be made on a pre-tax or post-tax basis if the employer permits.
  • The IRS limits the amount you can contribute to a retirement plan.
  • Individuals under the age of 50 can contribute up to $19,500 to a 401(k) in 2021 and $20,500 in 2022.
  • Individuals aged 50 and over may make additional contributions of $6,500 for a total of $26,000.