401k Plan Contribution Limits Increase for 2015
The IRS makes an annual assessment of retirement fund contribution limits, and will increase them if certain cost of living conditions are met. While the IRS won’t increase contribution limits every year, they also won’t decrease them either. At worst, contribution limits will remain stagnant. The good news is the IRS increased 401k contribution limits for 2015. The increase went from $17,500 up to $18,000. Catch-up contributions also saw a $500 increase, from $5,500 to $6,000.
There was also a $1,000 increase to the Total Contribution Limit, which comes to $53,000. The max deferred compensation includes employee contributions, matching contributions, bonuses, and other deferred compensation. (If you are over age 50, you can also add your catch-up contributions to this number, bringing the max total deferred contribution limit to $59,000 for 2015).
Let’s take a look at all of these numbers in more detail and discuss what they mean for investors.
401k Contribution Limits
How to read this chart: The following chart lists the 2015 401k plan contribution limits, along with the contribution limits from previous years. The number under the heading “Employee Contributions” applies to persons under age 50. “Catch-up Contributions” apply to people age 50 and over. The column labeled “Total Contribution Limit” is the maximum you can apply to your 401k plan in any given year, if you are under age 50. This includes all possible contributions, including employee contributions, employer contributions, profit sharing, or any other allowable contributions. The final column is the total contribution limit from all sources for those who are age 50 or older.Source: cashmoneylife.com