Maximum Contributions

[emmetttrudy]

I was wondering if anyone had a good chart for estimating the maximum DB contribution for one-person plans. For example, Current Age on the y axis, Normal Retirement Age on the x axis, and then an estimated maximum contirbution at the intersection of the two.

For example, someone who is currently Age 52, NRA = 65

Maximum annual DB contribution = $110,000??

Thanks!!

[Blinky the 3-eyed Fish]

No chart, but I will give you a simple age 52 calculation. Since there is no increase in the dollar limit from age 62 to 65 you certainly get a higher contribution assuming age 62 retirement, so I will give you that number.

I am assuming a lump sum with AE 5%/94 GAR and using the latest 10/08 transitional PPA rates. I am also assuming the dollar limit is the limiting factor and am not attempting to calculate a maximum deductible contribution under 404(o).

EOY 2008 Max Benefit = $185,000 * .1 * 1/12 = $1,541.67

$1,541.67 * 145.4707 (94GAR at 5.5%) = $224,268

$224,268 / (1.0615^10) = $123,472

For now until possibly removed by tech corrections, I would compare that number to the 105% rule, which I get to be $123,419.

AE yields a higher amount. Take the lesser of the three = $123,419 is my simple assumption funding amount.