2009 Retirement Plan Contribution Limits

With financial New Year's resolutions not yet dropped by the wayside, now's a good time to review the increased 2009 retirement plan contribution limits:

• Maximum 401(k) plan contribution: $16,500
• Maximum catch-up provision for those born before 1960: $5,500. This means someone born in 1959 or earlier can contribute up to $22,000, up from $20,500 in 2008. These limits are applicable for 401(k), 403(b) and 457 plans.
• Maximum AGI for credit for retirement plan payins: $55,500 for married filers, $27,750 for singles.

There is no change to the amount an individual can contribute to an IRA: $5,000, unless you were born before 1960, in which case the contribution limit rises to $6,000.

The range of income where you lose your ability to deduct your regular IRA contribution because you are eligible to participate in a workplace retirement plan increased for 2009. If married, the new phase-out range is from $89,000 to $109,000 ($55,000 to $65,000 if single). If one spouse in a married couple is not eligible to participate in a workplace retirement plan, then that spouse may deduct an IRA contribution until that deduction phases out between a combined AGI of $166,000 and $176,000.

The ability to make Roth IRA contributions is phased out between $166,000 and $176,000 for married couples and $105,000 and $120,000 for single individuals.

If you have the ability to save more for retirement, these higher limits may help. If not, consider saving what you can. If you can't put away $5,000 in an IRA before April 15, for example, what can you save by then?