Roth 401(k) and 403(b)
June 24, 2009 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
One of my fellow Garrett Planning Network members, Jim Blankenship in New Berlin, Illinois, did a great summary article on Roth 401(k)s and 403(b)s yesterday.
More and more companies are making the Roth 401(k) or 403(b) an option. Legislation was also recently signed allowing the Roth option to be made available for government employees in the TSP.
The Roth is not right for everyone, but it’s a truly fabulous option for many of us. You don’t get tax savings now, but your money is able to grow and be withdrawn tax-free in retirement (once you meet certain conditions). If it’s available now through your employer, I would definitely suggest taking a few moments to read Jim’s article and consider whether it makes sense for you. Let me know of any questions!
2009 contribution limits announced
November 2, 2008 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
On October 16, 2008, the IRS issued news release IR-2008-118 announcing cost-of-living adjustments to dollar limitations for pension plans. Items addressed for 2009 include:
Elective deferrals
* The annual elective deferral limit for 401(k) plans, 403(b) plans, 457(b) plans, SAR-SEPs, and the federal government’s Thrift Savings Plan increases from $15,500 to $16,500
* The annual elective deferral limit for SIMPLE plans is increased from $10,500 to $11,500
Employee “catch-up” contributions for individuals age 50 or older
* The annual limit on additional catch-up contributions to 401(k), 403(b), and Section 457(b) plans is increased from $5,000 to $5,500
* The annual limit on additional catch-up contributions to a SIMPLE plan remains unchanged at $2,500
Other key figures
* The dollar limit on annual additions to a defined contribution plan increases from $46,000 to $49,000
* The dollar limit on the annual benefit under a defined benefit plan increases from $185,000 to $195,000
* The annual compensation limit for qualified retirement plan purposes increases from $230,000 to $245,000
* The annual compensation amount used in the definition of a highly compensated employee increases from $105,000 to $110,000
* The annual compensation amount used in the definition of a key employee in a top-heavy plan increases from $150,000 to $160,000
* For purposes of determining a qualifying employee under a simplified employee pension (SEP) plan, the minimum amount of annual compensation is increased from $500 to $550