No. of Recommendations: 1
The catchup contribution is seperate and distinct from the IRC 415 limits. TRUE

The 2k contribution can be made once the 415 limits are reached.

The 2k catch up for age 50 or older is for the 401k elective deferral totally independent of the 415 limits.

401k is the section of the code which refers to pre taxed salary deferrals. There are profit sharing plans funded without employee deferrals.

The 415 annual additions limit consists of pre tax salary deferrals, after tax contributions(employee), forfeitures and employer contributions.

A Summary of Selected Provisions of the Economic Growth and Tax Relief Act of 2001 states "The annual additons limit for most defined contribution plans under Section 415 has been increased to the lesser of $40000 or 100% of compensation..."

Also, The College for Financial Planning has a chart with various limits included is the 415 limit at 40K, the 2k catchup is listed separately.

I find nothing that supports your assertation, however, retirement limits are very complex.


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