425 G. Street, Suite 405 Anchorage, Alaska 99501
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Copyright AEBS 2009
The material provided on this site is informational only and is not intended to provided legal or tax advice.
For detailed information please contact our office for a client specific review.
For detailed information please contact our office for a client specific review.
Alaska Employee Benefit Specialists
Support injured veterans and visit the "Wounded Warrior Project" home-page
Save for your future by contributing to a 401(k) plan. Dollars contributed today can grow into a significant nest-egg for
your retirement. See how much you can save and plan for your future by using the savings calculator below.
your retirement. See how much you can save and plan for your future by using the savings calculator below.
There is a limit on the amount of elective deferrals that you can contribute to your traditional or safe harbor 401(k) plan.
• The limit is $15,500 for 2008 and $16,500 for 2009.
• The limit is subject to cost-of-living increases after 2009.
Generally, all elective deferrals that you make to all plans in which you participate must be considered to determine if the
dollar limits are exceeded.
Although, general rules for 401(k) plans provide for the dollar limit described above, that does not mean that you are
entitled to defer that amount. Other limitations may come into play that would limit your elective deferrals to a lesser
amount. For example, your plan document may provide a lower limit or the plan may need to further limit your elective
deferrals in order to meet nondiscrimination requirements.
Catch-up contributions. For tax years beginning after 2001, a plan may permit participants who are age 50 or over at the
end of the calendar year to make additional elective deferral contributions. These additional contributions (commonly
referred to as catch-up contributions) are not subject to the general limits that apply to 401(k) plans. An employer is not
required to provide for catch-up contributions in any of its plans. However, if your plan does allow catch-up
contributions, it must allow all eligible participants to make the same election with respect to catch-up contributions.
If you participate in a traditional or safe harbor 401(k) plan and you are age 50 or older:
• The elective deferral limit increases by $5,000 for 2008 and $5,500 for 2009.
• The limit is subject to cost-of-living increases after 2009.
The catch-up contribution you can make for a year cannot exceed the lesser of the following amounts:
• The catch-up contribution limit, above, or
• The excess of your compensation over the elective deferrals that are not catch-up contributions.
• The limit is $15,500 for 2008 and $16,500 for 2009.
• The limit is subject to cost-of-living increases after 2009.
Generally, all elective deferrals that you make to all plans in which you participate must be considered to determine if the
dollar limits are exceeded.
Although, general rules for 401(k) plans provide for the dollar limit described above, that does not mean that you are
entitled to defer that amount. Other limitations may come into play that would limit your elective deferrals to a lesser
amount. For example, your plan document may provide a lower limit or the plan may need to further limit your elective
deferrals in order to meet nondiscrimination requirements.
Catch-up contributions. For tax years beginning after 2001, a plan may permit participants who are age 50 or over at the
end of the calendar year to make additional elective deferral contributions. These additional contributions (commonly
referred to as catch-up contributions) are not subject to the general limits that apply to 401(k) plans. An employer is not
required to provide for catch-up contributions in any of its plans. However, if your plan does allow catch-up
contributions, it must allow all eligible participants to make the same election with respect to catch-up contributions.
If you participate in a traditional or safe harbor 401(k) plan and you are age 50 or older:
• The elective deferral limit increases by $5,000 for 2008 and $5,500 for 2009.
• The limit is subject to cost-of-living increases after 2009.
The catch-up contribution you can make for a year cannot exceed the lesser of the following amounts:
• The catch-up contribution limit, above, or
• The excess of your compensation over the elective deferrals that are not catch-up contributions.