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401k question

January 3rd, 2007 at 03:48 pm

I just found out from HR that I cannot increase my 401k contribution to 6% because I am at the max of 5% (?!?!?!?!).

I thought that the IRS allowed around $15k. Even with the employer match I am not even close to that amount.

Can employers set limits on contributions?

5 Responses to “401k question”

  1. Broken Arrow Says:

    Strange. I know they can determine their match, but I didn't realize that they can set the max limit as well? Well, after the employer match, it's just as well to go with a separate IRA anyway....

    I'm going to keep an eye on this entry to see if someone else would know. I'm curious about this as well.

  2. HouseHopeful Says:

    I have that at my work too. I'm not sure why they do or can cap it though.

  3. Broken Arrow Says:

    Hmm, I would also recommend to ask this question in the forums. That should garner more aid.

    Since I'm here, I don't believe it can be capped. Or, at least Uncle Sam doesn't. They'll just tax anything beyond the IRS limit.

  4. LdyFaile Says:

    I'm capped at 15% and my employer doesn't match any of my contributions. I was up to 8% at one point but decided to drop it down to 3% so I can still be contributing something but have more money to throw at debt.

  5. frugalmomof1 Says:

    I talked to a few co-workers that are contributing 6% and 7%, so I contacted HR again. I guess she was *confused* thinking that I wanted to increase my contribution hoping to get a higher employer match, which is the lesser of 5% or $30/week.

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