Guest keep it simple Posted March 9, 2005 Posted March 9, 2005 Could anyone provide a 'dummies' version definition of a 401(k) catch up provision? Also, what are the contribution limits nowadays? Thank you!
Guest mmc Posted March 9, 2005 Posted March 9, 2005 The 402(g) limit for 2005 is $14,000 and participants age 50 by December 31st are eligible to defer an additional $4,000. The catchup contribution is not included in the 415 limit of $42,000 and it is not included in the ADP test. That explanation is VERY basic.
david rigby Posted March 9, 2005 Posted March 9, 2005 Not trying to deviate from the "simple life", but there are three possible limits: - 402(g) limit, mentioned above, - plan imposed limit, - limit reached via the ADP test. The catch-up contribution "kicks in" at the lowest of these limits. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Blinky the 3-eyed Fish Posted March 10, 2005 Posted March 10, 2005 A 4th is the 415 limit. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
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