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

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.

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

  1. Anonymous

    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

  2. Anonymous

    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.

  3. 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.

  4. Anonymous

    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…

  5. Anonymous

    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!

  6. Anonymous

    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.

  7. Anonymous

    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.

  8. Anonymous

    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.

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