Is there any IRS limit of total 401K contribution (including employer)? i.e. 15500+5500=21000?

Question

Is there any IRS limit of total 401K contribution (including employer)? i.e. 15500+5500=21000?

Answer 1

employee limit is $15,500.  this is called 402(g) limit

employee + employer limit is $46,000.  this is called the section 415 limit.  This does NOT mean the employer limit is $30,500.  The employer limit is $46,000 for those people who have $0 in employee contributions.   This is what is commonly known as the Defined Contribution limit which means the maximum that can be contributed to a Defined Contribution by either/or both employee and employer.  But again that 402(g) limit applies too!

In both cases if the employee is over age 50 then an additional contribution of $5,000 can be made.  This is the 414(v)(2)(B)(ii)

limt more commonly known as the "catch up" contribution.

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RF You are correct,  after-Tax does not enter into 402(g) limits.  BUT ROTH is combined with pre-tax deferrals and subject to 402(g) so that's why I said employee contributed rather than using pre-tax and after-tax. True after-tax plans (while still out there - my company has one) are a rarity these days unless it's a ROTH.  Another note...likely limit for 2009 is going to be $16,500 and total DC limit of $49,000.

Answer 2

The Basic Limit ($46,000 for 2008) is for the TOTAL contributions (you and/or your employer) can make. I don't think there is a specified "employer" limit as long as this total Basic Limit is not exceeded.

But I thought that the 402(g) limit applies to only tax-deferred (pre-tax) contributions you make. I thought you can also make after-tax contributions which would fall under the total Basic limit, but doesn't count toward that 402(g) limit.

Can anyone verify if this is correct or not?