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Posted: 11/28/2007 7:14:14 PM EDT
[Last Edit: 11/28/2007 7:18:39 PM EDT by FALARAK]
Link Posted: 11/28/2007 7:20:28 PM EDT
[Last Edit: 11/28/2007 7:21:53 PM EDT by SHIVAN]
$15k is the max, unless you are 50 or over.

The $15k ceiling is inclusive of any matching. When the total contribution (your dollars + their dollars) for the year get to $15k, payroll has to stop deducting it.

If you are 50 or over you can do an additional $5k "catch-up"/"fluff-up".
Link Posted: 11/28/2007 7:23:46 PM EDT
[Last Edit: 11/28/2007 7:24:12 PM EDT by FALARAK]
Link Posted: 11/28/2007 7:30:05 PM EDT
[Last Edit: 11/28/2007 7:34:26 PM EDT by SHIVAN]
At the beginning of the year you started at $0, when the TOTAL balance gets to $15k. They stop. You get to wait until next PLAN year to contribute again.

e.g. Your money + Employer Money = $15k = STOP!


There are guys in our company who contribute the maximum allowable under the plan, and in a few pay dates, they are done for the plan year.

To complicate matters, if you are considered a HCE (highly compensated employee) and your plan is subject to anti-discrimination testing, your total allowable contribution may end up being less than $15k for the plan year.
Link Posted: 11/28/2007 7:48:02 PM EDT
[Last Edit: 11/28/2007 7:51:01 PM EDT by FALARAK]
Link Posted: 11/28/2007 8:21:14 PM EDT
The max this year is $15,500 from the EMPLOYEE. There may be a separate maximum, but that is from the company that is matching funds.

To be clear: The companies match is not included in the $15,500 figure.

Additionally, and this is a question more people will be asking next year, if you have the option of selecting between a traditional 401(k) and a Roth 401(k), the max is still the amount you as an employee can put it, even between the two accounts.

You can't put 15 in one, and 15 in the other. Just doesn't work that way. The greedy swine in DC don't want us to be independent.
Link Posted: 11/28/2007 8:31:04 PM EDT

Originally Posted By SHIVAN:
$15k is the max, unless you are 50 or over.

The $15k ceiling is inclusive of any matching. When the total contribution (your dollars + their dollars) for the year get to $15k, payroll has to stop deducting it.

If you are 50 or over you can do an additional $5k "catch-up"/"fluff-up".


Not so (about payroll stopping to deduct automatically). Once the $15K is reached, the company continues to deduct from my paychecks and match my contributions except the money simply goes into a non-tax-free investment account. These are AFTER TAX contributions which means there's far lesser penalties for early withdrawal.
Link Posted: 11/28/2007 9:19:16 PM EDT
[Last Edit: 11/28/2007 9:22:02 PM EDT by ar-jedi]

Originally Posted By SHIVAN:
At the beginning of the year you started at $0, when the TOTAL balance gets to $15k. They stop. You get to wait until next PLAN year to contribute again.

e.g. Your money + Employer Money = $15k = STOP!


the above is incorrect.

$15.5K is the max contribution from the EMPLOYEE only.

ar-jedi

ETA:
en.wikipedia.org/wiki/401k

Contribution Limits

There is a maximum limit on the total yearly employee pre-tax salary deferral. The limit, known as the "402(g) limit", is $15,500 for the year 2007 [2], and will remain $15,500 for the year 2008 [3]. For future years, the limit will be indexed for inflation, increasing in increments of $500. Employees who are 50 years old or over at any time during the year are now allowed additional pre-tax "catch up" contributions of up to $5,000 for 2007 and 2008. The limit for future "catch up" contributions will also be adjusted for inflation in increments of $500. In eligible plans, employees can elect to have their contribution allocated as either a pre-tax contribution or as an after tax Roth 401(k) contribution, or a combination of the two. The total of all 401(k) contributions must not exceed the maximum contribution amount.

If the employee contributes more than the maximum pre-tax limit to 401(k) accounts in a given year, the excess must be withdrawn by April 15th of the following year. This violation most commonly occurs when a person switches employers mid-year and the latest employer does not know to enforce the contribution limits on behalf of their employee. If this violation is noticed too late, the employee may have to pay taxes and penalties on the excess. The excess contribution, as well as the earnings on the excess, is considered "non-qualified" and cannot remain in a qualified retirement plan such as a 401(k).

Plans set up under section 401(k) can also have employer contributions that (when added to the employee contributions) cannot exceed other regulatory limits. The total amount that can be contributed between employee and employer contributions is the section 415 limit, which is the lesser of 100% of the employee's compensation or $44,000 for 2006, $45,000 for 2007, and $46,000 for 2008. Employer matching contributions can be made on behalf of designated Roth contributions, but the employer match must be made on a pre-tax basis.[1]
Link Posted: 11/28/2007 9:30:11 PM EDT
[Last Edit: 11/28/2007 9:32:05 PM EDT by ar-jedi]

Originally Posted By FALARAK:

Originally Posted By SHIVAN:
The $15k ceiling is inclusive of any matching. When the total contribution (your dollars + their dollars) for the year get to $15k, payroll has to stop deducting it.


So the speak more plainly - does inclusive mean - that they include the match and stop then?

As in... I have contributed 10k thus far.... and the company has matched 5k..... do they stop taking any money from my check or matching anymore? Or do they stop when MY contributions hit 15K.... and the match amount doesnt matter?


as noted in my prior post, the annual limit is $15.5K on EMPLOYEE contributions. if the company has matched an additional $5K, you will have a total of $20.5K contributions.

after you reach $15.5K of EMPLOYEE contributions in one year, one of the following three things will happen, in accordance with the plan documentation you were handed when you started your 401k:

(1) nothing. however, before april 15th of the following year you will need to have your plan administrator refund your excess contributions.
(2) your employer will stop making pre-tax contributions on your behalf.
(3) your employer will stop making pre-tax contributions on your behalf and instead start making after-tax contributions on your behalf.

ar-jedi
Link Posted: 11/29/2007 4:48:21 AM EDT
Ain't it great to see posts that are made with an air of total authority, only to later find out that they're b.s.??
Link Posted: 11/29/2007 6:05:43 AM EDT
Well, then my company is doing it wrong....

Sorry FALARAK, sometimes you trust that your company does it right, only to find out they aren't...
Link Posted: 12/4/2007 6:10:43 AM EDT
[Last Edit: 12/4/2007 6:12:25 AM EDT by scuba_ed]

Originally Posted By SHIVAN:
At the beginning of the year you started at $0, when the TOTAL balance gets to $15k. They stop. You get to wait until next PLAN year to contribute again.

e.g. Your money + Employer Money = $15k = STOP!


There are guys in our company who contribute the maximum allowable under the plan, and in a few pay dates, they are done for the plan year.

To complicate matters, if you are considered a HCE (highly compensated employee) and your plan is subject to anti-discrimination testing, your total allowable contribution may end up being less than $15k for the plan year.


This is inaccurate.

The maximum allowed contribution to a 401-k is $15,500 for fiscal year 2007 & 2008. The $15,500 is the maximum YOU CONTRIBUTE! It is NOT dependant upon matching funds. Regardless of the extent to which your employer matches funds, employer matching DOES NOT apply to your $15,500 contribution.

ETA: I should have read FALARAK's reply...he nailed it.



Link Posted: 12/4/2007 6:17:01 AM EDT

Originally Posted By scuba_ed:
This is inaccurate.


Yes, thanks for reminding me -- uh -- 5 days later.

Let's just say we had some very nice discussions about how our 401(k) deductions are being handled.
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