415 Limit and Catch-Up

[CLE401kGuy]

Scenario:

Participant does $15,000 401k in calendar year 2013.

Participant is over age 50.

Participant receives PS of $41,500.

In the ADP test, I will use $9,500 for the elective for this participant since total annual additions will be $56,500 for him / her meaning $5,500 of the $15k elective has to be catch-up.

Agreement? Any thoughts?

[Lou S.]

agree

[ETA Consulting LLC]

Agree. The participant may defer $5,500 and receive an employer contribution of $51,000; leaving zero in the ADP test. Just adding another example to show how it works.

Good Luck!