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Contribution Limits Remain Unchanged in 2011

Employees saving for their retirement through Pre-Tax retirement benefits  are not getting any favors from the government this year. The contribution limits for the major employer-sponsored retirement plans:

403(b)s, 457(b)s and 401(k)s, not get an increase. That means like in 2010, the 2011 limit remains $16,500 for those under age 50.

Those who are age 50 and older get the benefit of a catch-up contribution of an additional $5,500.

While this may not seem like a big deal if you don’t max out your contribution anyway, you have to wonder why. They say there isn’t enough inflation to warrant an increase, yet everywhere we look prices are rising. Not only that, but politicians remind us regularly that as a whole we aren’t saving enough and have problems with Social Security, yet no new incentives are ever put in place to encourage people to save more.

The 15-Year Rule
Additionally there is a 15-Year Rule that can increase your yearly 403b contribution.To qualify for this additional contribution, you must have at least 15 years of service with your qualifying employer. Your additional 403b contribution under the 15 Year Rule can be as much as
$3,000.00 per year".

 

Type of contribution Limitations

2011

 

 

Elective Deferrals 403(b) and 401(k) and; not including adjustments and catch-ups)

$16,500

457(b)(2) and 457(c)(1) Limits (not including catch-ups)

$16,500

Section 414(v) Catch-Up Deferrals to 403(b), 457(b), 401(k), or SARSEP Plans 9/

$5,500

Defined Benefit Plans

$195,000

Defined Contribution Plans

$49,000

Annual Compensation Limit

$245,000

Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993

$360,000

Highly Compensated Employee ("HCEs")

$110,000

Individual Retirement Accounts ("IRAs"), for individuals 49 and below

$5,000

Individual Retirement Accounts ("IRAs"), for individuals 50 and above

$6,000

SIMPLE Retirement Accounts

$11,500

SEP Coverage

$550

SEP Compensation

$245,000

Tax Credit ESOP Maximum Balance

$985,000

Amount for Lengthening of 5-Year ESOP Period

$195,000

Excess Distribution Threshold

N/A

Qualified Police and Firefighters' DB Benefit Limit

N/A

Income Subject to Social Security Tax

$106,800

FICA Tax for employers

7.65%

FICA Tax for employees

5.65%

Social Security Tax for employers

6.2%

Social Security Tax for employees

4.2%

Medicare Tax for employees and employers

1.45%

FICA Tax for self-employed workers

13.3%

Social Security Tax for self-employed workers

10.4%

Medicare Tax for self-employed workers

2.9%


_______________________________________________________________________

Moti Gur is a Registered Representative with and securities offered through Financial Network Investment Corp and Cetera Adviser Networks LLC.
A registered broker/dealer, Investment advisor and member FINRA/ SIPC
3807 Wilshire Blvd, Suite 1040 Los Angeles, CA 90010 213-385-6237
http://www.financialnetwork.com

 

 
     
   
   
 
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