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Asked 1/19/2010
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Is there a salary cap one can make before they are not allowed to contribute to a 401K? and have to go to a deferred comp pl I was contributing to a 401k but now my employer is saying I make too much money and now I HAVE to contribute to a deferred comp plan. I can not find anything with the IRS that indicates such a statement. Is this true? |
Answer 1/1 - Submitted 1/20/2010
"There are other limits that restrict contributions made on your behalf. In addition to the limit on elective deferrals, annual contributions to all of your accounts - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeitures to your accounts - may not exceed the lesser of 100% of your compensation or $49,000 for 2009 and 2010. In addition, the amount of your compensation that can be taken into account when determining employer and employee contributions is limited. In 2009 and 2010, the compensation limitation is $245,000."
(from the IRS website)
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