401k Recovery Advice

How To Save More For Your Retirement

Investopedia |

In Brief...

Thanks to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), various limits on retirement plan contributions were increased, effective for tax year beginning 2002, allowing you to add even more to your tax-deferred accounts. To make realistic projections for your retirement planning, you need to be aware of these limits and the other benefits brought about by EGTRRA. Saver's Tax Credit As a means of encouraging certain taxpayers to contribute to their retirement plan, Congress included a provision in EGTRRA that allows eligible individuals a tax credit for contributions made to IRAs and employer-sponsored retirement plans. Employer Contribution Limit For SEPs, IRAs, profit-sharing plans, money purchase pension plans and 403(b) accounts, your employer may contribute up to $49,000 to your account for 2010. For SIMPLE plans, your employer may either match your contribution to the plan dollar-for-dollar up to 3% of your compensation, or make a non-elective contribution of 2% of your compensation.

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