Advice for Savvy Retirement Planning

401K Contribution Limits For 2015

401K Contribution LimitsEach year the IRS publishes updated Maximum 401K contribution limits, as well as catch-up contribution limits for the new year. Typically, the limits the IRS sets each year is based on inflation factors (with minimum $500 increases), so they do not necessarily increase the limit each year.

The 401K Contribution Limit for 2015 has now been set, with an increases of $500 over 2014, to $18,000. The Maximum 401K contribution Limit for 2013 and 2014 was $17,500.

READ: Don’t Buy-and-Forget the Investments in Your 401K Plan

IRA Contribution Limits 2014 and Previous Years

Recent History of Maximum 401K Contribution Limits:

As you can see, the Maximum 401K contribution limits do not rise dramatically each year. Although over time, if investors are diligent about increasing their contributions, it can certainly make a difference.

2015 – $18,000
2014 – $17,500
2013 – $17,500
2012 – $17,000
2011 – $16,500
2010 – $16,500
2009 – $16,500
2008 – $15,500

Over Age-50 Catch Up Maximum 401K Contribution Limits

For those of you that are over age 50 (or turn age 50 before the end of the year), you are allowed an additional 401K “catch-up” contribution. These limits also adjust for inflation, but at a much slower pace. The $500 increase to $6,000 for 2015 was the first “catch-up” increase since 2009:

2015 – $6,000
2014 – $5,500
2013 – $5,500
2012 – $5,500
2011 – $5,500
2010 – $5,500
2009 – $5,500
2008 – $5,000

Employer Match and Total Maximum 401K Contributions

In addition to total allowable employee 401K contributions, there is a maximum total contribution allowed into your 401K (when factoring in employer match). For 2014, the maximum allowed to be contributed into your 401K is $52,000 (or 100% of income, whichever is greater) and will rise to $53,000 in 2015 (with minimum $1,000 increases thereafter). Therefore, with employee standard contributions, potential over-50 “catch-up” contributions, plus employer contributions, the maximum overall contributions are $57,500 in 2014, rising to $59,000 in 2015.

For IRS Limits on Other Types of Retirement Plans (ie. SIMPLE, SEP, etc.), please see IRS Retirement Plans Guide

————————————————————————–

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

See my Google+ Profile

Find Us on Google+ Google+