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Does anybody know how the limit works on the percentage you can contribute into your 401k? My company allows me to put up to 7% of my pay into the plan and they match 100% of whatever I put in. But, I have heard from different sources that the law says, if you are in a corporation, you can put up to 15% in the plan even if the company only matches up to a certain percent, such as 7% as with my company.

Thanks
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Greetings, Tax06, and welcome. You asked:

Does anybody know how the limit works on the percentage you can contribute into your 401k? My company allows me to put up to 7% of my pay into the plan and they match 100% of whatever I put in. But, I have heard from different sources that the law says, if you are in a corporation, you can put up to 15% in the plan even if the company only matches up to a certain percent, such as 7% as with my company.

In reality, the law allows a percentage limit of up to 25% of annual compensation between you and your employer combined. The plan documents, though, may limit your contribution percentage to a lesser amount, and many employers ensure the documents do just that. Your plan evidently is one that does.

For a brief explanation of defined contribution plans (to include those with the 401(k) option), see my Foolish Retirement Plan Primer at http://www.fool.com/Retirement/RetirementPlanPrimer.htm.

Regards..Pixy
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