401(k) Contribution Limits

• Posted on January 25, 2012
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Long Island CPA Firm Offering Tax and Financial Advice

Many employers offer what are commonly referred to as 401(k) plans, named after the tax code section that created the plans. These plans allow employees to defer part of their earnings for retirement. Some employers offer matching contributions that increase the attractiveness of the programs.

The value of 401(k) plans is enhanced even further by increasing the general contribution limit and allowing individuals over age 50 to make additional contributions. Where an employer’s plan permits, individuals can contribute amounts that are not excluded from income to a 401(k) plan in a manner similar to Roth IRA contributions.

Catch-up contributions are exempt from the regular dollar limits on deferrals provided that all 401(k) plan participants are permitted to make catch-up contributions.

The table below summarizes the inflation adjusted limits for 401(k) plans for 2009 through 2012. If you have additional questions about participating in your employer’s 401(k) plan, please call this office.

Year	2009 - 2011	2012
Under Age 50	16,500	17,000
Age 50 & Over	22,000	22,500