401k Contribution Limits

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If you have a 401(k) plan, you may be interested in contributing as much as you can. But how much is that?

It depends on many factors. First, government guidelines specify the maximum you can contribute to a 401(k) plan, and the maximum changes every year. In 2008, it’s $15,500. In 2009 and beyond, that number will be adjusted for inflation.

This figure doesn’t include any funds that your employer might graciously add to your account—and this is important, because many employers will also “match” your 401(k) plan contributions, in part or in full.

There are limits on the total employer and employee contributions. In 2008, they can’t exceed 100% of your salary or $46,000—whichever is lower. Again, in 2009 these limits will be adjusted for inflation.

Finally, keep in mind that these are just general guidelines, as 401(k) contribution rules are complex. Your 401(k) plan administrator or employer can provide more details.

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