2011 vs 2010 401k, 403b Contribution and Catch-up Retirement Plan Limits

Updated Nov 2011] The IRS has now released the official 2011 401k, 403b and other retirement plan contribution limits. These have been updated based on 2010 cost of living adjustment (COLA) figures. With COLA remaining unchanged again this year, retirement plan limits have also remained unchanged for the third year in a row. This is good news for many who had feared that the limits would be reduced. Each year in October these limits are adjusted according to a formula based on the inflation rate (linked to COLA) in the third quarter vs. the previous year’s quarter.

What this means for your 401k, 403b and other retirement plans: The maximum amount an employee can contribute to a 401k in 2011 will remain at $16,500 and for individuals over the age of 50, their catch-up contribution will also remain unchanged at $5,500 (see table). The Federal government’s Thrift Savings Plan and other retirement-savings plans – like 403(b) and 457(b) plans – are subject to the same limits.

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The Million-Dollar Retirement Plan

Achieving millionaire status is a noteworthy financial goal. But saving $1 million doesn’t necessarily mean you are ready to retire or that you will be able to afford a lavish retirement lifestyle. Here’s what it takes to save that amount over a working career and how much income you can expect a $1 million nest egg to provide in retirement.

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