The IRS has made a few changes to federal tax brackets and increased the maximum contribution levels of several retirement plans for 2009. The big changes came to employee sponsored deferral programs such as the Thrift Savings Plan and the 401(k) plan – and similar plans such as the 403b, 457, 401a Plans.
Retirement Plan Contribution Limits for 2009
401(k) contribution limits: $16,500 (under age 50); $22,000 (over age 50)
Roth and Traditional IRA contribution limits: $5,000 (under age 50); $6,000 (over age 50)
Thrift Savings Plan contribution limits: $16,500 (under age 50); $22,000 (over age 50)
Future retirement plan contribution limits will be pegged to inflation levels and raised in $500 increments.
Contribute as much as you can now
It’s best to contribute as much as you can contribute to your retirement accounts because that gives your money more time to grow via compound interest. If the current markets make you nervous, then consider placing your money in a high interest money market account or a CD until you feel more comfortable investing the money in equities. Most retirement accounts have a cash fund or cash equivalent, which leaves you no excuse not to start investing now!
Comments
I was a deployed service memebr for 5 months in 2009 and 6 months in 2010. I am over 50. Can I contribute $22,000 to my 401(k), plus $22,000 to TSP, plus $6000 to an IRA? If not, what is the maximum I can contribute in 2009 and 2010. Thanks.