Letter: C

The maximum amount of money you can contribute to your 401(k) each year, set by the federal government. The limits change every year to track inflation. In 2018 you can contribute up to $18,500. If you’re 50 or older, you can contribute an additional $6000 (called a “catch-up contribution”), for a total of $24,500. These limits do not include the match contributed by your employer to your account.

The amount of each paycheck that is deposited in your 401(k) account. This money is taken out of your paycheck before taxes are deducted. You decide on the amount of your contributions, up to certain annual limits. In some plans, the employer also makes contributions, matching the employee’s contributions up to a certain percentage.

A provision that allows employees who are at least 50 years old to make contributions to a 401(k) plan above the regular annual limit. This allows workers to “catch up” with saving as they get closer to retirement.