What Are Contribution Limits For 401K & Roth Ira’S For 2010?

The government has increased the contribution limits for 401K and Roth IRA’s for 2010. What are the contribution limits?

For those who are enrolled in retirement plans the most important question for this year is what are contribution limits for 401K and Roth IRA’s for 2010. The government has raised the limits to offset expected rise in the cost of living during the retirement years.

Contribution Limits for 401K for 2010

Beginning with the employer and employee based 401K retirement plan the allowable contribution limit has been raised from $15,500 in 2008 to $16,500 for 2009 and 2010. The employee contribution cannot exceed 25% of the employee’s income. The $16,500 contribution limit is for the employee who is age 49 or younger during the year 2010. An employee has a contribution cap of 25% of his earned income up to a maximum contribution of $16,500.

If the employee is 50 years old or older during the tax year 2010, he may contribute 25% of his income up to a total employee contribution of $22,000. The 2010 contribution is up from the cap on contributions of $20,500 in 2008.

Contribution Limits for Roth IRA for 2010

The Roth Ira has an allowable $5,000 contribution plus inflation for 2010. Based on the government’s choice to not include a cost of living increase for seniors due to inflation, it must be assumed that the allowable contribution for the Roth IRA is remaining at $5,000 per qualifying person. Qualifications are based on the individual’s income.

If a person is age 50 or older he may make an additional $1,000 (plus inflation) contribution called the catch up contribution to his Roth IRA. There is no indication of inflation being taken into account for 2010.

The Roth IRA contribution limits have not been raised since 2007.

Related posts

1. How Much Can I Put In My 401K?
2. What Are The Limits On 401K?
3. What is the Max Contribution to 401k?
4. Can I Contribute To A 401K And Roth Ira?
5. 401k Maximum Contribution Limits

Send this page to a friend ...

Enter friend's email address
.