UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next
Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75796  
Subject: Re: 401K contrib limit? Date: 12/3/1998 1:33 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Greetings, Dek4, and welcome. You asked:

<<I posted this a few days ago but now can not locate the post or any possible answers, please excuse if this a duplicat. If you were kind enough to answer, would you please repeat the answer. Many thanks.

I am needing clarification on 401K annual contribution limit makeup. Is the $10,000 limit referring only to the employee's deferal amount before any employer match is added? (Thus the annual employee+employer match amount put into the account could be over $10,000.) Or is it the combined amount that must not exceed $10,000?>>


The amount you contribute (i.e., what gets deducted from your paycheck) may not exceed the lesser of 25% of your gross pay or $10K. The percentage limit is reduced by any contribution made by your employer. If your employer puts in 6% of your pay, then you may only put in the lesser of 19% or $10K. Additionally, your contribution may be further restricted if you are in the "highly compensated" group and the "lower compensated" don't contribute enough; however, that gets into the arena of discrimination testing, which can get a tad complicated to explain. Suffice it to say that if you contribute the maximum allowed by the percentage/$10K rule as previously explained and you still end up getting part of that contribution back as an "excess" contribution, then you are in the highly compensated group and got caught up in the discrimination testing rules.

Regards….Pixy
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement