2008 401 (k) Catch Up Provision for Employees Age 50 and Older from Internal Revenue Service
In 2008, for employees who are age 50 and older by the end of the tax year there are additional contribution limits above the maximum of $15,000 plus inflation. The chart below shows the recent annual catch-up limits for employees who qualify by age.
|
Year |
Max Catch Up Contribution |
|
2004 |
$3,000 |
|
2005 |
$4,000 |
|
2006 |
$5,000 |
|
2007 |
$5,500 |
|
2008 |
$5,500 |
For example, if inflation is 3% in 2006, then an employee age 50 or older could contribute $21,000 to their 401(k) pre-tax.
|
Contribution Type |
Dollar Amount |
| 2008 401(k) Max |
$15,000 |
| Inflation Adjustment |
$500 |
| 2008 Catch-Up Max |
$5,000 |
| Catch-Up Inflation Adjustment |
$500 |
|
Total Contribution |
$21,000 |
* Please note in 2011, the maximum contribution will revert back to the 2001 level on January 1, 2011 unless congress votes to extend the increased limits beyond that date.
Please contact your financial or tax advisor for more information.
