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401(k), 403(b) and 457(b) Contribution Limits for 2008

Written by Nickel - 16 Comments

A reader named Tom recently wrote in with the following question:

I have been looking online for 2008 403(b) contribution limits and can’t find the info. Can you tell me what the 2008 403(b) contribution limits are? Or where I can find them?

After a bit of digging, I was able to find the answer… Unfortunately, according to a recent press release from the IRS, the limit on elective deferrals will remain unchanged for 2008 at $15,500/year. This applies to things like 401(k), 403(b) and 457(b) plans.

The good news is that aggregate limit (employer + employee contributions), which is specific by Section 415(c)(1)(A) of the Internal Revenue Code, is increasing from $45,000/year to $46,000/year (this is the so-called 415(c) limit). So there’s a bit of extra breathing room for retirement contributions, but only if your combined employee/employer contributions are bumping up against the limit.

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Published on October 29th, 2007
Modified on February 19th, 2008 - 16 Comments
Filed under: Retirement, Saving & Investing, Taxes

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

16 Responses to “401(k), 403(b) and 457(b) Contribution Limits for 2008”

1
mapgirl Says:
October 29th, 2007 at 10:28 am
http://www.irs.gov/retirement/.....61,00.html

The second line of the table, the 402(g)(1), elective deferrals being the key line.
2
Bob Says:
October 29th, 2007 at 11:00 pm
Don’t forget the $5,000 “catch up” addition if you are 50 or older!

http://www.irs.gov/retirement/.....86,00.html
3
Ed Says:
October 30th, 2007 at 12:51 am
That sucks, I had read somewhere (Kiplinger’s online?) that 401(k) was going to $16,000.

I guess not.
4
Pinyo Says:
October 30th, 2007 at 12:06 pm
I am not complaining at the moment since I am having hard time maxing out my 401k. Maxing out 401k will be even tougher in 2008 with Roth limit up to $5,000 per year.
5
Ben Says:
November 2nd, 2007 at 12:02 pm
Wait. Does this mean that the $15k limit on contributions is a limit on MY contributions, not on the sum of my contributions and employer match?

Man, if that’s true, I had it all wrong.
6
nickel Says:
November 2nd, 2007 at 12:05 pm
Yes.
7
Ben Says:
November 2nd, 2007 at 12:12 pm
Holy smokes. That’s really good information.

When I had a session with the retirement counselor earlier this year, I asked about that same thing, and was given to understand that the $15k limit was an aggregate.

Yeesh.

Thanks. You’ve just given me some very valuable information.
8
rido Says:
November 2nd, 2007 at 12:17 pm
Jim Cramer…THE SOURCE ON MONEY…gives his take on 401k plans….Great tip!

http://www.maxim.com/AskJimCra.....tst167:MKd
9
My Dollar Plan Says:
November 7th, 2007 at 11:09 am
Don’t forget that in the public sector, if your employer offers a 403b and a 457 plan, the annual limit is per plan. So you can put $15,500 in each plan. This enables you to defer $31,000 total!
10
brian Says:
December 9th, 2007 at 9:30 pm
hey there – jim cramer says in his new book (stay mad for life, pg. 93) that the yearly 401k limit, say 15.5k, applies to the total of both your 401k and roth ira contributions… does anyone have support for that or know whether or not it’s true???… thanks…
11
nickel Says:
December 9th, 2007 at 9:34 pm
Cramer must be talking about a Roth 401(k), not a Roth IRA. They’re different things. All 401(k)-type accounts from a single employer are subject to the $15.5k limit (so regular and Roth 401(k) would share this limit). IRA limits are a separate thing.
12
Tom Says:
January 3rd, 2008 at 12:16 am
I have just been classified as a “Highly Compensated Employee” (HCE) for 2008 and now my contributions are capped at the average 2% for a total of 6%; with this cap in place I am far short of the annual contribution max. Any tips on alternatives? I don’t qualify for Roth IRA or a Deductible IRA.
13
My Dollar Plan Says:
January 3rd, 2008 at 10:59 am
Tom, you can do the non-deductible IRA with plans to convert it to a Roth in 2010.
14
nickel Says:
January 3rd, 2008 at 11:05 am
Tom: Madison is correct, but there’s a big “gotcha” if you’re not careful. See here for details:

Look Before You Leap: Roth IRA Conversions in 2010
15
tim Says:
January 21st, 2008 at 3:00 pm
I currently put14% of my income in a city 457 plan. With the market dropping so rapidly, is it smart to lower my differed comp rate or stay as is? I will retire in 15 years.

Thanks,

Tim
16
Tom H Says:
February 8th, 2008 at 1:45 pm
The 401k calculator mentioned in the appropriate area does not work, it is useless.

Tom H

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