Your 401k Contribution Limits in 2011 and 2012

Do you have a 401k plan?

If so, you will be subject to maximum contribution limits on your plan.  In our guide, we look at your 401k contribution limits in 2011 and 2012 and what the ‘catch-up’ limits are.

401k Contribution Limits In The Past


For many years, many people saved too little into their 401k plan or failed to join a scheme immediately.  This means that they weren’t seeing enough growth in order to secure a comfortable retirement, partly because the 401(k) contribution limits were rising at too slow a pace.

However, since the Restoring Earnings to Lift Individuals and Empower Families (RELIEF) Act of 2001, you are now allowed to catch up on lost time and to enhance your retirement fund.

401K Contribution Limits

Contribution limits to 401k plans have begun to increase more steeply since 2004 meaning that it is possible to save more into your retirement portfolio.  Contribution limits to a 401k plan will also continue to be indexed to inflation over the next couple of years.

The pre-tax 401k contribution limits set by the IRS over the last few years have been:

  • 2008       – $15,500
  • 2009       – $16,500
  • 2010       – $16,500
  • 2011       – $16,500

The contribution limits over the next couple of years will rise to:

  • 2012       – $17,000
  • 2013       – plus an index for inflation ($500 increments)

As the figures above demonstrate, in 2013 contribution limits that apply to 401k plans will be indexed for rises in the cost of living.  These limits can move up in $500 increments in the future.

Pre-Tax 401k Contribution Catch-Up Limits

If you have reached the age of 50 or over, there is an added benefit in the form of a ‘catch-up’ provision.  This allows people who reach the age of 50 before the end of the calendar year to make additional 401k contributions on a pre-tax basis.  The past, current and future ‘catch-up’ limits are:

  • 2008       – $5,000
  • 2009       – $5,500
  • 2010       – $5,500
  • 2011       – $5,500
  • 2012       – $5,500
  • 2013       – $5,500 plus and index for inflation ($500 increment)

As with the standard contribution limits, the ‘catch-up’ contribution limits will continue to be indexed for inflation in 2013, and can increase in $500 increments.

After-Tax / Total 401k Contribution Limits

In addition to the pre-tax contribution limits outlined above your 401k plan may also allow you to make after-tax contributions.  When these are added to your pre-tax contributions they become your total 401k limit.

You also have a total limit to your 401k contributions.

In 2011, the total that can be contributed to a 401k plan is $49,000 or 100% of your compensation, whichever is less.   In 2012, the total contribution limit will be indexed to inflation, and moved up a $1,000 increment to $50,000.

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