Static Limits For 2010 401K Maximum Contribution

by David Jenyns on July 24, 2011

Annual 401K contribution is essential in order to keep up with your retirement savings, and planning for it early on is one way to ensure that it will be attained. It is also anticipated that the maximum 401K contribution per year will change. Since the 401K maximum contribution for 2010 is unchanged, people are probably worried and thinking of what to do with their 401K accounts.

The low cost of living index and inflation rate are the two of main reasons why the 2010 401K maximum contribution has not yet changed. While the economy is still struggling to recovery, many financial aspects are hit and are largely affected . Retirement plans for employees are just some of the numerous financial programs that got hit by the economic down-turn.

With the values (of almost everything) depreciating, particularly in 2009, 401K plans consequently lost around an average of 25% in value. It was quite apparent that year that the 401K contribution limits 2010 will be a direct hit – and it was.

As it was in 2009, the maximum 410K contribution per year was still at $16,500 for those who are 49 and below. The amount of catch up contribution was also at $5,500 and it is only meant for those who are 50 and above.

The best possible plan can be set-up by the IRS during these times. But it is still the government’s decision since the IRS is not the author of the policy that governs 401K. The static contribution amounts is a serious issue, especially now that it’s been running for three years. This only means that the economy is still struggling to recover and the cost of living has not yet improved.

For now, there’s nothing you can do but to wait for updates. However, it will be better if you check the IRS website before the year ends, in order to get the latest updates. 

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