What is the 401K Contribution Limit?

401k Contribution Allowance Yearly for 2009 and 2010

Here are some answers to your 401k questions regarding contribution amounts for the years 2009 and 2010. It is better to save for retirement than not, 401k plans are a good idea.

A common question on the lips of people who desire to have a little bit saved up for their retirement is:

What is the 401K contribution limit?

The answer is not a complex one, so the opportunity to save for your retirement years whenever they may come is there for the taking.

In most circumstances your employer will help you save for the future and your desire to retire a bit more affluently than without a 401k. This is usually done by virtue of a small amount taken from your wages on every pay cycle. You may have already discussed the amount to have taken from your wages; or it may be a fixed amount that you won’t even notice.

Your annual earnings can decide on the amount you can put away into a 401k, which is 10% of your yearly wage if your employer chooses this option to pay for you.

What is the contribution limit of one such option an employer might take out for you?

This could be $50,000 = Maximum $5000 401k investment per year – this is just one example.

One good point to remember about your 401k plan is that you can transfer it from employer to employer quite easily.

2009 – 401k Contribution Limits

• For people under 49 – Maximum allowed contribution is $16,500.

• For people over 50 – Maximum allowed contribution is $22,000.

2010 – 401k Contribution Limits

• For people under 49 – Maximum allowed contribution is $16,500.

• For people over 50 – Maximum allowed contribution is $22,000.

If you are self employed you may be eligible to save more with a Solo 401k plan. This could be up to $51,000 (Ask your financial advisor for more information).

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5. How Much Can I Put In My 401K?

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