What is the maximum amount of money I can contribute to my 401k annually? Does the amount increase each year?
Elective deferral limits for 2005 is $14,000. It will then increased by $1,000 each year till $15,000 in 2006, and then indexed in $500 increments. But this can be reduced based upon plan restrictions and government regulations. In addition, there are special non-discrimination rules to prevent highly compensated employees (HCE) from being able to save substantially more than lower paid employees. A complete table of plan limits for the years 2000 – 2005 is available by clicking here.
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