Online Calculator | Looking At 2010 401k Contribution Limits Before 2012 Comes

Looking At 2010 401k Contribution Limits Before 2012 Comes

401k plan is considered as the main ticket of most employees to a financially secure life after retirement. To those who are hanging on to 401k as their chief financial lifeline, they’re usually the employees who are maximizing the allowable contributions per year. If you’re on the same boat as these people, you’re looking forward to contribution limit increase every year. And you’ve probably been disappointed somehow a couple of times. Unchanged since 2009, the 2010 maximum 401k contribution was retained also for this year.

The limits to contributions for employee benefits assisted by the US government vary according to the yearly cost of living every. The 401k total contributions for the whole year may increase by $1,000. But there were ramblings in 2009 that last year’s maximum limits were even going to be cut off by $500.

While food, gas and other basic necessities were more affordable during the past two years due to the low inflation, the retention of financial limits for Social Security beneficiaries and retirement plans like 401k was a downside.

The 2010 401k max on elective deferrals, which are your pre-tax salary deductions, was $16,500 for traditional and safe harbor plans. It was $11,500 for SIMPLE 401k plans. These remained the same this year.

401k plan participants would probably know that there is an added benefit called catch-up contribution if you are at least 50 years of age. In 2010, qualified plan participants could give a catch-up contribution of up to $5,500 for a traditional or a safe harbor plan. You could add up to $2,500 to your elective deferral if you’re in a SIMPLE 401k plan.

You can also choose to give more to your 401k with your after-tax salary. The only rule here is that when your after-tax contribution is added to your pre-tax one, the sum should not go beyond the set total contribution for the year. The 2010 maximum 401k contribution was $49,000 or 100% of your whole compensation, whichever is less. This remained, too, for 2011.

Those who’ve been giving the maximum to their 401k are, perhaps, expecting limit increase in 2012. Being able to contribute more to their retirement savings is their usual concern and not the effects of a full-blown inflation.

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