What Are The 2009 401k Contribution Limits And What Will It Mean For You?
When you finish your working years you will not want to have to worry about finances, which is why so many people want to put money away while they still can to enable them to have a good retirement...
You can put away as much as you wish to and of course the amount you are able to afford but it is good to know that up to a certain amount you will not have to worry about taxation which will mean the amount you put in remains yours.
The 2009 limits have increased by $1000 which is good news for you savers. This brings the amount up to $15500. This is the amount you can put away before any taxes are liable. These figures are for people who are aged under 50 and in employment.
Anyone over the age of 50 and still working has a higher amount that they can save before taxation and this amount is $22000 per year.
The person you are employed by will sometimes also contribute to your pension fund so you will be able to get this amount on top of what you have decided to contribute. As an example so you can understand is that if a person was earning each year $100000 the company they work for would in addition contribute anything up to $6000.
At the end of 2009 comes the beginning of a new year and with that comes extra allowances on the amount of money you can pay in towards your pension tax free. Make sure to evaluate the 401k withdrawal rules if that's your goal. The reason why this is done every year is due to the rise in cost of everything because of inflation. If this was not done then the money you have saved up that seems a significant amount now will not be such a good amount when you come to retire.
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If you'd like the updated 401k contribution limits you can check the site as it's updated upon the release of the latest limits. Make sure you closely follow the 401k withdrawal rules, as these can be a bit tricky.