Retirement account contribution limits for 2009

IRS has published the following contribution limits to retirement plans for 2009.

The maximum pre-tax contribution allowed to 401(k) and 403(b) accounts for 2009 is $16,500, which is $1000 more than it was for 2008. Those who are over 50 are allowed to contribute an additional $5,500 in "catch-up" contributions. This is $500 more than it was for 2008.

Note that this is the maximum allowed by IRS. Your individual plan may have additional restrictions that prevent you from contributing the full amount. It is important to check with your plan administrator.

For IRAs (both Traditional and Roth), the contribution limit is the same as for 2008 ($5,000). The contribution limit for those over 50 is also the same as before ($6,000).

To be eligible to fully contribute to a Roth IRA, your adjusted gross income (AGI) must be under $166,000 (increased from $159,000 for 2008) for taxpayers filing a joint return. For single taxpayers, the AGI limit is increased from $101,000 to $105,000.

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3 comments:

Shallow Purple said...

Thanks for this informative post.I had a quick question. Is the limit of $16,500/yr on 401(k) applied to only individual employee contribution or to the sum of employee and employer contribution?

Canopybowstars said...

Thanks for the information. Your blog continues to be one of my favorites. Keep up the great work!

Nigel said...

shallow purple,
No, this limit does not include any employer match that you receive. Since the employer match is not counted in your taxable income, IRS doesn't include it in the limit that it publishes. The $16,500 is the maximum amount you can deduct from your income for 401(k) contributions.

By the way, many 401(k) plans allow you to contribute after-tax money, which is not subject to this limit either.

canopybowstars,
Thanks for the comment!