Wait 'til Next Year

The Internal Revenue Service (IRS) in October announced an increase in contribution limits for defined contribution (DC) plans for 2009. An IRS news release said the limit governing 401(k) plans, the federal government’s Thrift Savings Plan (TSP), and other similar programs—provided for by Section 402(g)(1)—increased from $15,500 to $16,500. The limit for DC plans under Section 415(c)(1)(A) increased from $46,000 to $49,000. Other 2009 limits detailed in the IRS announcement include:

• Elective Deferrals, 401(k) & 403(b) plans): $16,500
• Annual Benefit Limit: $195,000
• Annual Contribution Limit: $49,000
• Annual Compensation Limit: $245,000
• 457 Deferral Limit: $16,500
• Highly Compensated Threshold: $110,000
• SIMPLE Contribution Limit: $11,500
• SEP Coverage: $550
• SEP Compensation Limit: $245,000
• Income Subject to Social Security: $106,800
• Top-Heavy Plan Key Employee Comp: $160,000
• Catch-Up Contributions: $5,500
• SIMPLE Catch-Up Contributions: $2,500