If You’re Only Maxing Your 401(k), You’re Likely Leaving Tens of Thousands on the Table.
- Ben Clarke
- Nov 20, 2025
- 4 min read
Not personalized financial advice - your money, your choice.
$23,000 per year. This is the maximum amount most Americans think they can save pre-tax for tax year 2025.
In reality, this isn’t even close. The truth is, there is no universal ceiling. Instead, different account types have their own limits — some limits stack, some share buckets, and some don’t overlap at all.
This is why perfectly normal people (not ultra-rich loophole hunters) can legally shelter $75,000–$150,000+ per year while thinking they’re just “maxing their 401(k).”
I went into this wanting to understand how much I can actually save pre-tax. This matters because I want to keep more of my income and accelerate wealth. But the rules are confusing, and most people only learn the surface-level limits. Therefore, here’s the real structure — the one the IRS never put into one place.
To start, accounts fall into 2 categories:
Stacking accounts (these do NOT share limits).
Shared-limit accounts (these DO share limits).
With stacking accounts, you can max these out at the same time:
401(k) employee contribution
401(k) employer match
IRA (traditional or Roth)
HSA
FSA (as long as not Healthcare FSA with HSA)
SEP IRA or Solo 401(k) (if self-employed)
529 plans
Backdoor Roth
Mega backdoor Roth
Deferred compensation plans (if offered)
To recap, each of these buckets is independent. Maxing one doesn’t reduce your ability to contribute to another.
With shared limit accounts, these accounts reduce each other because they come out of one combined IRS bucket.
Examples:
Traditional IRA + Roth IRA shares a $7,000 (or $8,000 age 50+) combined limit.
If you’re under 50 and put $2,000 in your Roth IRA, you can put a maximum of $5,000 into your Traditional IRA
Healthcare FSA + HSA do NOT stack. You usually can’t have both unless your FSA is limited-purpose. That means it’d be ok to have an HSA if your FSA is one of these types:
Limited Purpose FSA
Dependent Care FSA
Parking/Transit FSS
403(b)s and 401(k)s sometimes share a limit and sometimes don’t — it depends entirely on employer structure.
If both plans come from the same employer or employer group:
They share the $23,500 employee contribution limit.
If they come from completely unrelated employers (rare but real scenario):
The contribution limit is $23,500 for each ($47k total)
This confuses a lot of people (and many HR departments) because the rules involve “controlled group” definitions — something only CPAs and tax attorneys typically understand. It’s also rare for someone to work for two unrelated employers offering different plan types, which is why many people never encounter this scenario.
Employee limit: $23,500
Employer match + profit sharing: Up to $46,500 more
Total possible into your 401(k): $70,000
$7,000 per person
$8,000 if 50+
Individual: $4,300
Family: $8,550
+$1,000 catch-up at 55+
Healthcare FSA: $3,300
Dependent Care FSA: $5,000 per household
No federal annual limit
Only state gift-tax rules apply
Additional $23,500 separate from 401(k)**
Many government/large hospital employees accidentally double up without realizing it’s legal
You can contribute ~20–25% of business profits up to $70,000 total.
You can’t contribute to both a SEP-IRA and a Solo 401(k) for the same business, but you can contribute up to the combined limit in a single plan.
The total max contribution is the lesser of $70,000 or 100% of compensation
So how much could one person actually save pre-tax? Here’s where my mind broke a bit because I thought the limit was $23,500.
Here’s a scenario of a W-2 employee with one 401(k) and one HSA.
They could shield:
Account | Max 2025 |
401(k) employee | $23,500 |
401(k) employer match* | $10,000 |
IRA (Traditional or Roth)** | $7,000 |
HSA | $4,300 |
Healthcare FSA*** | $3,300 |
Dependent Care FSA | $5,000 |
529 (optional, after tax) | Unlimited but tax-advantaged growth |
*Employer match amount ($10,000) is an estimate - match varies by employer (typically 3-6% of salary)
**Income limits apply and the Backdoor & Mega Backdoor Roth bypasses them
***Only if HSA is not used or is limited-purpose
This means that this person could have tax-advantaged savings/investing/contributions of $53,100 ($89,500 per year if a family and employer maxing out 401(k) match), while most of us are left thinking the limit is $23,500.
IRS rules are scattered across dozens of publications. They never created a single universal chart.
Employers often don’t understand the rules themselves (worth talking to a CPA/Accountant/Tax professional), especially when it comes to:
401(k) vs. 403(b) vs. 457(b)
FSAs vs. HSAs
Roth vs. Traditional
Controlled group employer relationships
Self-employed retirement limits
Special cases like deferred compensation
On top of that, account names overlap in frustrating ways.
IRA, SEP IRA, SIMPLE IRA.
401(k), 403(b), 457(b).
FSA vs. HSA.
Different rules, similar names, and unique situations for every person.
No wonder people get stuck!
Most people dramatically underestimate how much they can shelter from tax because they think the limit is $23,500 but the reality is that there is no single limit and the limit will depend on the situation of the taxpayer.
There are dozens of independent buckets, and when you understand which ones stack and which ones share, you can save much more pre-tax than the average person.
Understanding these rules is not about loopholes. It’s about knowing the system well enough to take advantage of benefits that are already available to you.
If this helped demystify how some people pay so much less tax, consider subscribing to my YouTube channel or newsletter! I do suggest talking to a tax professional should you have specific questions about your own situation.
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