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.

Published on October 29th, 2007 - 16 Comments
Filed under: Retirement, Saving & Investing, Taxes
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Comments (scroll down to add your own):

http://www.irs.gov/retirement/.....61,00.html

The second line of the table, the 402(g)(1), elective deferrals being the key line.
Comment by mapgirl — Oct 29th 2007 @ 10:28 am
Don’t forget the $5,000 “catch up” addition if you are 50 or older!

http://www.irs.gov/retirement/.....86,00.html
Comment by Bob — Oct 29th 2007 @ 11:00 pm
That sucks, I had read somewhere (Kiplinger’s online?) that 401(k) was going to $16,000.

I guess not.

Comment by Ed — Oct 30th 2007 @ 12:51 am
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.
Comment by Pinyo — Oct 30th 2007 @ 12:06 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.
Comment by Ben — Nov 2nd 2007 @ 12:02 pm
Yes.

Comment by nickel — Nov 2nd 2007 @ 12:05 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.
Comment by Ben — Nov 2nd 2007 @ 12:12 pm
Jim Cramer…THE SOURCE ON MONEY…gives his take on 401k plans….Great tip!

http://www.maxim.com/AskJimCra.....tst167:MKd
Comment by rido — Nov 2nd 2007 @ 12:17 pm
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!
Comment by My Dollar Plan — Nov 7th 2007 @ 11:09 am
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…
Comment by brian — Dec 9th 2007 @ 9:30 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.

Comment by nickel — Dec 9th 2007 @ 9:34 pm
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.
Comment by Tom — Jan 3rd 2008 @ 12:16 am
Tom, you can do the non-deductible IRA with plans to convert it to a Roth in 2010.
Comment by My Dollar Plan — Jan 3rd 2008 @ 10:59 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

Comment by nickel — Jan 3rd 2008 @ 11:05 am
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
Comment by tim — Jan 21st 2008 @ 3:00 pm
The 401k calculator mentioned in the appropriate area does not work, it is useless.

Tom H
Comment by Tom H — Feb 8th 2008 @ 1:45 pm