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I wrote, The federal contribution limits ($17,500 in 2013) on 401k plans are the same whether the contributions are pre-tax or post-tax.

To which you replied, That is quite a change from the days when I participated in 401ks. Back the combined max was always much higher, often $10K more.

I think you may be confusing some numbers. I believe there is some limit to how much that can be contributed in total and it also depends on whether we are talking deductible contributions or not. For instance, the maximum that can be contributed in total to a defined contribution plan for 2013 is $51,000. If you're self-employed, you can hit this by contributing an amount (from gross income) equal to up to 25% of the compensation you pay yourself.

Suppose your contracting business makes $100K in a year and it is all profit (from labor). You could pay yourself $80K in compensation and contribute $20K to your 401k as the employer. Then as an employee you can contribute an additional $17,500 - $23,000 if you are eligible for catch-up contributions. That would let you defer taxes on up to $45,000/year or 45% of your gross. However, the combined contributions would get capped out at $51,000 in 2013 if you made more.

There are lots of other numbers that affect who can ultimately contribute what. I suspect most people are constrained by the basic numbers discussed this board. The changes to the 2013 numbers are listed on the IRS website at

- Joel
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