IRS Limit 401K

[ATCJeff]

Could someone verify that the 2007 IRS limist for contributions, not counting catch-up, is $15,000. Can't believe they did not raise it this year. That hurts.

 

[Birchtree]

Well, it's actually $15,000 (indexed to inflation) whatever that comes out to be. You are not ready for prime time catch up yet? That stays at $5,000. That extra K plus match is down right beneficial when one does the DCA.

 

[TiCKed]

Found this on the IRS website, but it's really hard to tell what is up-to-date, and what is not:

http://www.irs.gov/retirement/participant/article/0,,id=151786,00.html

To quote:

"There is a limit on the amount of elective deferrals that you can contribute to your traditional or safe harbor 401(k) plan.

- The limit is $15,000 for 2006 and increases to $15,500 for 2007.
- The limit is subject to cost-of-living increases after 2007.

Generally, all elective deferrals that you make to all plans in which you participate must be considered to determine if the dollar limits are exceeded."

One would think the same information exists somewhere on the TSP website....but I haven't found it yet.

 

[TiCKed]

Just to follow up...

The TSP site only lists $15,000 for 2006 and thereafter. No mention of $15,500 for 2007, or cost of living increases in the future.

Either the IRS information is pretty new, or over-written by later legislation.

Bottom line....Don't trust me.

 

[fabijo]

Quote from TSP.gov (http://www.tsp.gov/curinfo/plannews.html):

IRS contribution limits for 2007 — For 2007, the IRS permits you to contribute up to $15,500 in tax-deferred money to the TSP. If you will be age 50 or older during 2007, you may contribute up to $5,000 in additional "catch-up" contributions if your regular contributions for the year reach the $15,500 limit.

 

[ChemEng]

This is good info... Need to remember to update my contributions by years end. Thanks!

 

[TiCKed]

Quote from TSP.gov (http://www.tsp.gov/curinfo/plannews.html):

IRS contribution limits for 2007 — For 2007, the IRS permits you to contribute up to $15,500 in tax-deferred money to the TSP. If you will be age 50 or older during 2007, you may contribute up to $5,000 in additional "catch-up" contributions if your regular contributions for the year reach the $15,500 limit.

Sheesh...I spent 15 minutes searching the TSP site, and couldn't find this!:cheesy:

Thanks!

 

[ATCJeff]

This is good info... Need to remember to update my contributions by years end. Thanks!

Thanks eveyone. I wish congress would lift the limit. Now that would really help my account. Anyway, $500/26 should be about $19.54 per pay period. I guess every little bit helps.

 

[atcsat64]

Thanks eveyone. I wish congress would lift the limit. Now that would really help my account. Anyway, $500/26 should be about $19.54 per pay period. I guess every little bit helps.

I read on some gov website that 2007 will have 27 pay periods, and I adjusted my deductions to match. I can't remember where I saw it, and I haven't seen ANY other discussions yet. Anybody know for sure?

 

[nnuut]

I read on some gov website that 2007 will have 27 pay periods, and I adjusted my deductions to match. I can't remember where I saw it, and I haven't seen ANY other discussions yet. Anybody know for sure?

Yes, it has been discussed here before, 2007 has 27 Paydays! I thought it might be good for my high 3!

 

[atcsat64]

Yes, it has been discussed here before, 2007 has 27 Paydays! I thought it might be good for my high 3!

Wow, didn't even think about high 3. Guess that's one way to get a raise! 3.8% by my calcs:nuts:

 

[Wheels]

Wow, didn't even think about high 3. Guess that's one way to get a raise! 3.8% by my calcs:nuts:

As was discussed earlier, extra pay periods in a month don't help. Your high three is based on your "average" salary during your highest consecutive 36 months of pay.

 

[James48843]

Note:

I don't think any deferred compensation (TSP cut) can be counted when calculating the "high three".

I read something some time ago that talked about maxing out TSP until your very last three years, because the high three only counts taxable income, and not any non-taxable TSP contribution. The article said you actually have to crunch the numbers in your own situation to see if it worked out better financially to max or not to max TSP during the final three years.

I don't know where I read that.

 

[mayday]

Note:

I don't think any deferred compensation (TSP cut) can be counted when calculating the "high three".

I read something some time ago that talked about maxing out TSP until your very last three years, because the high three only counts taxable income, and not any non-taxable TSP contribution. The article said you actually have to crunch the numbers in your own situation to see if it worked out better financially to max or not to max TSP during the final three years.

I don't know where I read that.

If this is true its a rip off. I've got to look in to this.

 

[mayday]

If this is true its a rip off. I've got to look in to this.

I always thought our base salary was used to arive at our high three retirement calculation. I have never read anything anywhere about what is talking about.

 

[grandma]

When my retirement was calculated they used the base; there was no consideration to the OT, nor to any deductions. They did not have that information in front of them. They had the current base and the dates of each raise; the information that we get the carbon: Notification of Personnel Action.

 

[Wheels]

I always thought our base salary was used to arive at our high three retirement calculation. I have never read anything anywhere about what is talking about.

I believe James is mixing apples and oranges (or maybe alcohol and sleeping pills). Your contributions are not subtracted from your salary before determining your high 3.

 

[mayday]

I believe James is mixing apples and oranges (or maybe alcohol and sleeping pills). Your contributions are not subtracted from your salary before determining your high 3.

Thanks Wheels that eases my mind. I do'nt have to change strategies.