UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: MiteEMouse Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75540  
Subject: New Tax Law: Maximum 401k & 403b contributions Date: 6/3/2001 10:25 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Many thanks to "W401K" for the useful links he provided in posts 29994 and 29963, on the new tax bill's impact on retirement accounts (http://www.universalpensions.com/alert/Alert05302001.asp and http://www.tagdata.com/).

Using these links, I arrived at some tentative conclusions regarding maximum annual employee contributions to 403(b) and 401(k) plans, under the new tax law. But I was surprised by some of my conclusions, and so I am hoping for some additional verification/opinion/feedback from fellow Fools.

For 403(b) plans, it appears that virtually *all* employees are now allowed to contribute the full maximum dollar amount ($11K in 2002, $12K in 03, $13K in 04, $14K in 05, $15K in 06) regardless of what percent this is of their salaries (just so long as the sum of employer plus employee contributions is less than both $40K and 100% of salary, which is almost always the case).

On the other hand, for 401(k) plans, in addition to the maximum dollar amount limit ($11K in 2002, and so on), it seems that there is also something called the "employer deduction limit for profit sharing plans." This has been increased from 15% to 25%. So it appears to me that in practice, many 401(k) participants will also be limited by 25% of their salaries.

Mite E. Mouse

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Post of the Day:
Value Hounds

Kate Spade's Wild Ride
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
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