401k Catch Up Contributions

If you are older than 50 years or will be 50 by the end of the tax year, then the IRS has a special provision allowing you to contribute to your 401k above and beyond the typical dollar limits set for your 401k plan. These contributions are called "401k catch up contributions".

401k Catch up contributions for traditional 401k plans or safe harbor 401k plans:

According to the IRS, for the 2009 401k contribution limit is $16,500 (this an increase from the 2007 and 2008 401k contribution limits of $15,500).This is the maximum amount you can contribute to your safe harbor or traditional 401k plan. However, if you are 50 years old or older, or you will be 50 during the current year then you are allowed to defer an additional $5,500 from your salary into your company's 401k plan in 2009 provided your company's 401k plan allows for catch up contributions. Not all 401k plans offer catch up contributions nor are they required by law to do so. The 2009 401k catch up contribution limit is an increase from the $5,000 allowed for 2007 and 2008.