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Here are the limits for your 401k and catch up for 2007
Elective deferrals 401(k), $15,500
Catch-up contribution$5,000
Hope this helps
If you turn 50 years old this year you can contribute an additional $5,000. You don't have to wait for your birthday to begin making the additional contributions. Most employers don't provide a match on the catch-up contributions. If you're a highly compensated employee, these contributions won't have an impact on discrimination testing.
The rules are fairly straightforward, but there are a few nuances that are important to understand. Congress added the new catch-up contribution limits to retirement plans out of concern that baby boomers hadn't been saving enough for retirement. These new limits enable savers age 50 and over to increase contributions at a time when retirement draws near.
How They Work
The limit works as follows, assuming you are age 50 or older in 2002: You may make an additional $1,000 pretax contribution to your 401k plan, on top of your regular pretax contribution limit. The catch-up limit will increase $1,000 a year until reaching $5,000 in 2006. Starting in 2007, further increases (in $500 increments) will be indexed to inflation. By the way, the catch-up provision will expire along with the rest of the tax bill in 2011, unless Congress extends it.
The nice thing about the catch-up limit is that it is not subject to any other federal or plan contribution limits. Catch-ups are made on top of your current limits. After you contribute the full $11,000 allowed in 2002, you may make an additional $1,000 contribution, for a total of $12,000.
If your plan has restrictions that prevent you from contributing the full $11,000, such as capping contributions at 15 percent of pay, you can still contribute the $1,000 on top of your other limit. This even holds true if your contributions are capped because you are considered a highly compensated employee (HCE). Indeed, the IRS is willing to let employers classify excess 401k contributions (up to $1,000) as catch-up contributions. So, if you are an HCE who is 50 or older, and your plan allows catch-up contributions, you should be able to contribute $1,000 over your HCE limit in 2002 without worrying about a refund. We've received a number of questions from participants wondering whether they can simply write a check for $1,000 to their 401k. The answer is "no." All 401k contributions must be made through payroll deduction. If you want to make a $1,000 contribution from a single paycheck, make sure you can afford this reduction in your salary for that pay period.
You can't take advantage of the catch-up contribution until your employer amends its plan document to allow them. While many employers did this at beginning of the year, others, for a variety of reasons, don't plan to offer catch-up contributions immediately. If you are unsure when your plan may offer catch-up contributions, check with your benefits department.
This is a long subject-too lengthy to handle in a chat session. There are hundreds of web sites available through Google but I recommend the IRS.gov site for best information. I know age and income are specific items in a 401k plan and there are the two types of 401k, traditional and Roth Ira. My single advice is to getinto both types rather than just one. It will give you more options in the future.
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