Strengthen Your Income Planning Strategy With Maximum 401k Contributions

Taking advantage of the 401K contribution limits set for 2011 can help you boost

your income planning strategy for retirement and provide you with financial relief when you retire. Maxing out how much you contribute can generate substantial amounts in your account balance, which can turn into larger withdrawals in retirement.

Contribution limits to retirement savings plans such as the 401K and 403B and other associated information are renewed per year, based on the COLA or Cost Of Living Adjustment figures of the previous year. Currently, the COLA numbers are the same, resulting in a relatively stable three years in terms of how much workers can contribute to these savings plans for retirement. Some experts predicted lower limits for 2011; a fortunate error for the millions of seniors who stand to rely mostly on fixed income from their contributions. Contribution limits are reset every October, with a formula that depends on the inflation rate of the third quarter of that year compared to the performance of the same quarter from the year before.

2011 401K Contribution Limits

What is the potential impact of the new contribution limits on retirement plans such as 401Ks and those who own these accounts? First, you will need to know the contribution limits or maximum contributions for 2011. These limits are still at $16,500 for the entire year for participants aged 50 years and below, and $22,000 per annum for workers older than 50. The amounts for catch-up contributions still hold, with some limits also applying to other savings plans for retirement, such as Thrift Savings Plans and 403Bs.

You will have to remember that the 401K contribution limits also depend on the combined total contributions you can make for all plans, including standard retirement plans and different ones like Roth 401Ks. Employer matching contributions are not included towards the final 401K contribution ceiling, with matches added to your account balance independent of the set 401K contribution limits.

Although these comparatively high limits (and potentially larger distributions in retirement) have been present for a couple of years, there are still a surprising number of workers who do not use them. Some, for example, do not contribute an adequate monthly amount to be able to receive the largest employer matches. Although the market crash and other financial reasons may be behind the inability to contribute enough and receive the free money, the retirement income planning strategy of many an average worker can be much stronger if any surplus funds are used to max out some retirement plan contributions.

by: Katherine Smith

POST COMMENT

Guideline About Roulette Strategy Good Roulette Strategy Puzzles In Brand Positioning, Brand Strategy And Direction Is Not Clear Your Losing Pounds Strategy: Taking A Closer Look The Strategy of BOLD A Strategy for Action - Mind Power Plus Qigong Equals Your Awesome World! Best Cityville Strategy For Fast Cityville Level Expansion Deep Linking – Forgotten Link Building Strategy How Bruce Lee Defeated The Stalking Method Of Classical Karate Fighting Strategy Eagle Force Refuting Rumors Of Loss Of High-end Strategy Has Yet To Test - Eagle, Gome, The New Success is the Result of a Success Strategy - How Can You Do it Too? A Simple Link Building Strategy For Getting To The Top Straddle option strategy