What Is The Maximum Pre-Tax 401K Contribution?

Plan for a financially secure future, maximize your earnings by maximizing your 401K contributions

A 401K plan is an excellent way to save money for your retirement. By making contributions from your income with pre-tax dollars, you delay having to pay income taxes on your earnings until you start taking distributions from the plan. Your money grows faster, because you have more money to invest.

What Is The Maximum Pre-Tax 401K Contribution?

For tax year 2009, the maximum contribution you can make to your 401K with pre-tax dollars is $16,500. This amount is periodically adjusted for inflation and historically does increase. In 2006 for example, the maximum contribution was only $15,000. For 2007 and 2008 the maximum contribution was increased to $15,500.

What is a catch-up contribution for a 401K?

If you are 50 years of age or older you can also make what is called a “catch-up” contribution for your 401K plan. For 2009, in addition to the $16,500 allowable contribution, you can also contribute an additional $5,500 if you meet the age requirements. This is a great way to add to your “nest-egg” and maximize your 401K contributions.

Are there any other ways to increase my contribution to my 401K?

Some companies have 401K plans that offer employer matching programs. If your plan offers such a benefit, you should consider taking advantage of it. Different companies have different plans and you should check with your human resources department to see how your plan works. It is in your best financial interest to, at the very minimum, contribute enough to qualify for the maximum match possible.

By taking advantage of maximum 401K contributions, catch-up contributions and employer matching programs, you can grow your retirement fund to a level that will make your “golden years” peaceful, happy and financially sound.

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One Response to “What Is The Maximum Pre-Tax 401K Contribution?”

1. ana gomez says:

   November 25, 2011 at 2:34 pm

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