401k Contribution Limits - Saving for Retirement
If you are still saving for retirement, you'll be able to sock away a bit more as 401k contribution limits have been raised in 2009. Find out how much you will be able to sock away in your 401k plan, 403b retirement plan or defined benefit plan in the following table.
For example, the maximum annual benefit under a defined benefit plan is $195,000 in 2009, up from $185,000 in 2008. The maximum annual contribution for defined contribution plans is $49,000 in 2009, up from $46,000 in 2008. The annual compensation limit used for determining retirement plan contributions is $245,000 in 2009, up from $230,000 in 2008. The maximum annual contribution to a 401k plan, 403b, and 457 plan is $16,500 in 2009, up from $15,500 in 2008. The catch up contribution for an individual age 50 or older is $5,500 in 2009, up from $5,000 in 2008.
Are you setting enough money aside for your retirement?
Dollar cost averaging is one of the best ways to set aside money for retirement especially if you have many more years to contribute to an employer 401k plan, 403b or other retirement plan.
The IRA contribution limits for determining the deductible amount of an IRA contribution for individuals who are active participants in a company retirement plan is:
- $89,000 in 2009 for married couples filing a joint return
- $55,000 for single individuals
The IRA contribution limit for an individual who is not an active participant in a company retirement plan (but whose spouse is) is $166,000.
| 401k Contribution Limits | |
|---|---|
| Retirement Plan Limits | 2009 |
| Maximum annual benefit under a defined-benefit plan | $195,000 |
| Maximum annual contribution for defined-contribution plans | $49,000 |
| Annual compensation limit used for determining retirement plan contributions | $245,000 |
| Maximum annual contribution to 401k, 403b, and 457 plans | $16,500 |
| Catch-up contribution for individual age 50 or older | $5,500 |
| Maximum annual SIMPLE employee deferral | $11,500 |
| Simplified employee pensions (SEP) minimum compensation | $550 |
| Maximum annual IRA contribution | $5,000 |
| Catch-up IRA contribution | $1,000 |
| Income of key employee in top-heavy plan | $160,000 |
| Definition of highly compensated employee | $110,000 |
Source: Internal Revenue Service, IR-2008-118, Oct. 16, 2008
Return from 401k Contribution Limits to Retirement