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What is the maximum amount that I can contribute to my 401(k) plan?
For 2005, the maximum amount anyone can contribute to a 401(k) plan is $14,000, except for catch-up contributions for employees age 50 or over, which is $18,000. ($15,000 and $20,000,respectively in 2006). There are several different limits that apply to a 401(k) plan in addition to the overall contribution limit. The maximum you can contribute will depend on your salary and the type of 401(k) plan to which you are contributing. The maximum amount that can be contributed by the employee or employer is the lesser of 25% of compensation or $42,000 in 2005 ($44,000 in 2006). The rules for retirement plans are complex. Your plan administrator should have written information about your particular plan that explains these limitations as well as other regulations that apply.
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