Comments on: 401(k) Contribution Limits for 2009 http://www.consumerismcommentary.com/2009/01/02/401k-contribution-limits-for-2009/ A premiere personal finance blog, established 2003. Within, Flexo discusses his own experiences with money, and he and other authors comment on a wide range of personal finance topics. Sat, 21 Nov 2009 16:42:00 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Andrew http://www.consumerismcommentary.com/2009/01/02/401k-contribution-limits-for-2009/#comment-187173 Andrew Tue, 06 Jan 2009 07:12:31 +0000 http://www.consumerismcommentary.com/?p=4963#comment-187173 The 401(k) and IRA limits are separate, so $15,500/$20,500 for all types 401(k)s and $5000/$6000 for all types of IRAs, for a possible total of $20,500/$26,500. The 401(k) and IRA limits are separate, so $15,500/$20,500 for all types 401(k)s and $5000/$6000 for all types of IRAs, for a possible total of $20,500/$26,500.

]]> By: David C http://www.consumerismcommentary.com/2009/01/02/401k-contribution-limits-for-2009/#comment-187012 David C Sat, 03 Jan 2009 17:34:21 +0000 http://www.consumerismcommentary.com/?p=4963#comment-187012 @ fv: as far as I understand it, they're separate so you could contribute up to $15.5k in a 401k and $5k/$6k to an IRA. An expert's opinion to back that up would be appreciated. Also, keep in mind that your employer may place a lower limit on contributions than the feds regulations provided above by Flexo. My work, for instance, only allows 25% of my salary to be place in my 401k so I can't contribute more than ~$13k to my 401k. @ fv: as far as I understand it, they’re separate so you could contribute up to $15.5k in a 401k and $5k/$6k to an IRA. An expert’s opinion to back that up would be appreciated.

Also, keep in mind that your employer may place a lower limit on contributions than the feds regulations provided above by Flexo. My work, for instance, only allows 25% of my salary to be place in my 401k so I can’t contribute more than ~$13k to my 401k.

]]> By: fv http://www.consumerismcommentary.com/2009/01/02/401k-contribution-limits-for-2009/#comment-187006 fv Sat, 03 Jan 2009 04:19:59 +0000 http://www.consumerismcommentary.com/?p=4963#comment-187006 Last year I contributed the maximum to my 401k and Roth IRA. It's not quite clear to me whether the law allows that or if there is a contribution maximum ($15500 for BOTH Roth IRA and 401k). Thank you. Last year I contributed the maximum to my 401k and Roth IRA. It’s not quite clear to me whether the law allows that or if there is a contribution maximum ($15500 for BOTH Roth IRA and 401k). Thank you.

]]> By: Flexo http://www.consumerismcommentary.com/2009/01/02/401k-contribution-limits-for-2009/#comment-187004 Flexo Fri, 02 Jan 2009 21:16:34 +0000 http://www.consumerismcommentary.com/?p=4963#comment-187004 CalGal: Employer match isn't considered in this 401(k) limit (there's a higher limit that all contributions, including employer match, is subject to). In my case, my employer matches the first 4% of my salary, but it does so on a per-paycheck basis. That means that if I hit the limit of my personal contributions in September and can no longer contribute to my 401(k) for the rest of the year, I won't receive any further employer match. In other words, I contribute 30% of each paycheck and my employer matches the first 4% of the paycheck. If I contribute 30% for the entire year and don't hit my limit, the company also contributes 4% every pay period. If I contribute 50% of my paycheck and hit the limit before the year is over, the 4% match will also stop. If I contribute only 3% in any one pay period, my match will also be only 3%. Many companies operate their matching contributions like this, but some don't. I will maximize my employer match by making sure I contribute at least 4% of my salary each pay period while not exceeding my personal contribution limit. If I hit the limit early, the employer match would stop when my contributions do. CalGal: Employer match isn’t considered in this 401(k) limit (there’s a higher limit that all contributions, including employer match, is subject to). In my case, my employer matches the first 4% of my salary, but it does so on a per-paycheck basis. That means that if I hit the limit of my personal contributions in September and can no longer contribute to my 401(k) for the rest of the year, I won’t receive any further employer match. In other words, I contribute 30% of each paycheck and my employer matches the first 4% of the paycheck. If I contribute 30% for the entire year and don’t hit my limit, the company also contributes 4% every pay period. If I contribute 50% of my paycheck and hit the limit before the year is over, the 4% match will also stop. If I contribute only 3% in any one pay period, my match will also be only 3%.

Many companies operate their matching contributions like this, but some don’t. I will maximize my employer match by making sure I contribute at least 4% of my salary each pay period while not exceeding my personal contribution limit. If I hit the limit early, the employer match would stop when my contributions do.

]]> By: CalGal http://www.consumerismcommentary.com/2009/01/02/401k-contribution-limits-for-2009/#comment-187001 CalGal Fri, 02 Jan 2009 20:26:50 +0000 http://www.consumerismcommentary.com/?p=4963#comment-187001 What do you mean by "danger"of missing out on employer match due to too high contribution rate? I believe employer match is not counted in 401K personal contribution limit. Can you clarify? Thanks What do you mean by “danger”of missing out on employer match due to too high contribution rate? I believe employer match is not counted in 401K personal contribution limit. Can you clarify? Thanks

]]> By: thomas http://www.consumerismcommentary.com/2009/01/02/401k-contribution-limits-for-2009/#comment-187000 thomas Fri, 02 Jan 2009 19:53:09 +0000 http://www.consumerismcommentary.com/?p=4963#comment-187000 I agree about the raising of limits. I just wish they didn't put restrictions on how much can be invested. Considering how much most people lost last year, it would be nice to take advantage of the down economy to help offset the losses long term. I agree about the raising of limits. I just wish they didn’t put restrictions on how much can be invested. Considering how much most people lost last year, it would be nice to take advantage of the down economy to help offset the losses long term.

]]> By: Chris http://www.consumerismcommentary.com/2009/01/02/401k-contribution-limits-for-2009/#comment-186994 Chris Fri, 02 Jan 2009 17:28:34 +0000 http://www.consumerismcommentary.com/?p=4963#comment-186994 I love that the government is raising these limits - it's just sad that a lot of people will probably cut contributions after the way the market performed last year. It sounds like you aren't falling into that trap - and hope all the other readers follow your example. I love that the government is raising these limits – it’s just sad that a lot of people will probably cut contributions after the way the market performed last year. It sounds like you aren’t falling into that trap – and hope all the other readers follow your example.

]]> By: Tessa http://www.consumerismcommentary.com/2009/01/02/401k-contribution-limits-for-2009/#comment-186992 Tessa Fri, 02 Jan 2009 16:20:37 +0000 http://www.consumerismcommentary.com/?p=4963#comment-186992 I contributed the maximum for 2008--$15,500. What I planned was to contribute enough each pay period so that my last check would secure my employers match, while giving me more cash for the holidays--about $375. Each pay period, I paid about $16 extra. It was great to have the cash "windfall" by "saving" throughout the year. I contributed the maximum for 2008–$15,500. What I planned was to contribute enough each pay period so that my last check would secure my employers match, while giving me more cash for the holidays–about $375. Each pay period, I paid about $16 extra. It was great to have the cash “windfall” by “saving” throughout the year.

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