0014 Retirement - Roth IRA & 401k Fund Contributions Limits

Here is a quick reference to the limits on contribution for 2006 & 2007

401k Fund Contributions Limits for 2006

Your 401k fund contribution limits set by the IRS for 2006 are:
# $15000 for those under 50 years of age

# $15000 plus $5000 additional catch up contribution for those over 50 years of age

Be sure to check with your employer for any limits set by your company's 401k plan.

To maximize your 401k, you should try to contribute the maximum amount you are allowed each year. (Read more at about.com).

401k Fund Contributions Limits for 2007

Your 401k fund pre-tax contribution limits set by the IRS for 2007 are:

# $15500 for those under 50 years of age

# $15500 plus $5000 additional catch up contribution for those over 50 years of age

Be sure to check with your employer for any limits set by your company's 401k plan.

Some addition to the contribution limits

Contributions to 401(k) plans, currently (2006) limited to $15,000, had been scheduled to drop back to $14,000 after 2010. Now the higher level will remain until inflation triggers future increases.

If you are already contributing to your 401K and maximized the employer matching contribution, you could contribute to a Roth IRA and it will tax-free when you start making withdrawals in retirement.

To read more read this article SOLVED: I Have a 401(k). Do I Need a Roth IRA?

One scenario from another article:

If a 25-year-old contributes $4,000 each year until she retires and makes an average annual return of 8% on her investment, she'll have more than $1.1 million saved by the time she retires at age 65.

Who can open a Roth IRA

You can't contribute to a Roth if you're single and your income exceeds $110,000 or if you're married with a joint income of more than $160,000.

How to invest your 401K monies help is here

Starting next year, you can get specific answers. In one of the new laws (2006) most controversial provisions, plan providers, including mutual fund companies, will be authorized to offer in-person investment advice. To ensure that the advice is unbiased and in your best interest, it must be based either on a computer model or offered by a financial adviser who charges a flat fee that's not tied to the recommended investment products.