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Exactly what are Your 401K Contribution Limits and How Do They Try to Build Wealth

Do you know your 2011 401K contribution limits? The 401k plan is a retirement plan that companies have for their employees to save for retirement. Congress helps to make the rules for that 401k contribution limits, not the government like many people think. For some years the limit may be the same, as the costs of living adjustment (COLA) did not change.

401k contribution limit

For instance in 2007 it absolutely was $15,500 and 2008 the limit was the same. The next year last year was $16,500 and 2010, it's the same which the limit for all those years. The year after of 2011 can be the same ($16,500) but with one more $5,500 for those who are age 50 or older. This is whats called the catch-up provision.

The next thing is that most employers get the chance to fit exactly what the employee has put in the master plan. For many,the quantity is $0.50 of each and every dollar the employee puts in. If they put in $1,000, the entire at the end of the season would be $1,500, excluding any investment gains. Many employers will match up to 3 to 5 percent of your gross salary. It would be foolish to not put in very much since that is free money.

pre-tax 401k contribution limit

If someone tries withdraw money out before they're age 59 and a half,, you will find severe penalties. They include ordinary tax on the amount withdrawn and a 10% penalty tax about the amount withdrawn. So many people are happy they have a 401K plan that they can give rise to and set inside the maximum 401K contribution limits. The results is going to be that you've enough money to live on when you can no longer work to maintain your loved ones. This is in addition to Social security income and pension include.

Don't delay in contribution for this account to construct wealth fast. Help make your 401K contribution limits count toward providing you with the retirement income which you deserve to get a comfortable future.

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