zlacker

But OP's point is that the 200k a year person could instead negotiate a 100k salary with an additional 100k into the 401k (by the employer) and that would be allowed.

Edit: Although it does appear there is a cap to the employer's contribution ($69,000 for 2024 [1]). But I think the general point still stands, why bother to have employer and employee limits.

[1]: https://www.irs.gov/retirement-plans/plan-participant-employ...

>>lesuor+(OP)
Well… they could negotiate $70k/yr from the employer, and that would be allowed (in 2025) without further employee contributions (as that hits the total max contribution limit).

A $200k/yr employee with no employer contribution would be limited to $23,500 contribution (in 2025 limits).

[edit] actually that’s not quite true, though, because IIRC contribution rules have to be uniform, to avoid horse-shit like maxing out upper management at $70k and contributing nothing for lower-level employees, limiting them to $23.5k tax-advantaged no matter how much hard try to save, I.e. to prevent the whole damn scheme from benefiting mostly the already well-off more than it’s probably going to regardless.