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I have a kind of "off-the-wall" question to ask about 401(k) contribution limits.

Before I ask the question, let me give a little bit of background. I know that the "annual deferral limits of qualified plans" for 2004 is $13,000. At my current job, I am allowed to contribute between 1% and 25% of my total salary, with my current contribution rate at 15%.

I will (almost certainly) be relocating to another state in the middle of next summer; if I do move, I will (almost certainly) be changing jobs. If I do change jobs, one of my search criteria for a new company will include the ability to contribute to a 401(k) plan (or some other similar retirement vehicle).

If I do wind up with a new job next year, I will be contributing to my present plan for a little more than half of the year and to the second plan for the rest of the year. So, here is the "off-the-wall" question that I have: if I participate in two different 401(k) plans in 2004, is the $13,000 limit for both plans combined or does each plan have it's own (separate) $13,000 limit?

Also, if the limits are for both 401(k) plans combined, am correct in assuming that I am responsible of making sure that I don't go over the $13,000 limit (for tax purposes)?

Thanks in advance,
MusicFish.
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The limit is $13000 total, regardless of number of employers you have.

As for the second part of your question, I'm curious as well... :)


Monster D
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Here's your answer I think. It's dated but the rules are the same I believe (goto http://invest-faq.com/articles/ret-plan-401k.html for more details...)

"Ok, let's talk about the IRS limits already. First, a person's maximum before-tax contribution (i.e., 401(k) limit) for 2001 is $10,500 (same as 2000, but will change in 2002). It's important to understand this limit. This figure indicates only the maximum amount that the employee can contribute from his/her pre-tax earnings to all of his/her 401(k) accounts. It does not include any matching funds that the employer might graciously throw in. Further, this figure is not reduced by monies contributed towards many other plans (e.g., an IRA). And, if you work for two or more employers during the year, then you have the responsibility to make sure you contribute no more than that year's limit between the two or more employers' 401k plans. If the employee "accidentally" contributes more than the pre-tax limit towards his or her 401(k) account, the employer must move the excess, or the excess contribution amount due to a smaller limit imposed by an imbalance of highly compensated employees, into a 401(a) account."

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Also, if the limits are for both 401(k) plans combined, am correct in assuming that I am responsible of making sure that I don't go over the $13,000 limit (for tax purposes)?

I don't know who is technically responsible, but tell your next employer how much you have already contributed for the year, and they should be able to make sure that you don't go over.

I used to do payroll for a small company using ADP, and ADP's software allows you to enter contributions made from a previous job so that the software would automatically limit the contributions for the year to the correct amount.

Other payroll systems are probably similar.
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jesserivera67 - Thanks for the information and the link.

MadCapitalist - Thanks for the information. I figured there was some setting like that, but I really didn't want to ask my (current company's) HR as I didn't want to tip my hand (too much).

Thanks again,
MusicFish.
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