IRC 401(k) Plans are a certain type of a retirement plan that you can choose if you do not still have any. As each of the retirement plans that are available on the market, this one also has to face some limits. Maybe not exactly the plan, but it's owner- for sure. If you have an 401k, you can, what is very convenient for almost all the employees contribute 10% of your salary each year. However, it depends on your employer because it is he or she who sets the limits for each of his or her workers.
The employees, who are paid more, can afford contribution in the height of $16 500 per year for each $50000 they earn and add $5000 to their savings. So the contribution may be really high. The plans can change each beginning of the year, according to the laws concerning years 2009 and 2010. But there is no plans to decrease the height of the contributions, if they will change, the managers say, they will be higher. Each plan of changing the limits is based on the increase of the cost of living, this means: prizes in the shops, costs of energy, water and sharing the flat during the prior year. The new is always announced by the IRS in the middle of October in the year before changes.
The limits are, as by almost each of the retirement plans a bit higher for the employees that are 50 years old or more. If you are in this age or maybe older, you can also be allowed to get a co called catch up 401k contribution that you will add to your normal limit but there is a problem, you can do so only if your boss will allow this additional contribution and the employers are not required to give you such a permission. But if you are the lucky one who is over 50 years old and has was employed by a person who allows this additional contributions, you can add $5500 each year and enjoy a really pleasant retirement in the future.
If you are employed in a bigger company, it may occur that you all will share the contribution limits. This is a co called employer match contribution. The matching contributions are made by your manager and under no circumstances are counted as your own limits that you have to obey each year. If you will put the maximum amount of your savings into the account, the match contributions are only the addiction to your own money that you contribute. The maximum match contribution is as high as your 6% tax compensation.
But the truth is that the limits are not so strict and depend on the 410k plan that you will decide for. You can choose this one that will be the most suitable for you. If you spend more you will not contribute the maximum so you can always choose another plan.