401(k) Catch-up Contributions?

[Jilliandiz]

Participant makes $13,000 in catch up contributions, he is over 50 for 2004. Can't he still receive $44,000 total, because any $3,000 of his 401k can be reclassified as catch-up?

401k = $13,000

PS = $41,000

Reclassify $3,000 as catch up, therefore 401k test only on $10,000???

For a total of $44,000

Any truth to this?

[Jilliandiz]

Or another scenario, can the PS be a total of $31,000 to get him to the $44,000 limit?

[Guest seissler]

I think in your first example (assuming 2004) you meant:

$13,000 deferrals

$3,000 catchup

$28,000 profit sharing contribution

$44,000 total

That is fine.

It is also okay to have:

$10,000 deferrals

$3,000 catchup

$31,000 profit sharing contribution

$44,000 total

The catchup can apply either when the deferrals are over the 402(g) limit for 2004 of $13,000 or the total allocations are over the 415 limit of $41000 for 2004. It can also apply when the deferrals are over a plan imposed limit.

[Jilliandiz]

great sounds like i had the right idea...thanks