Confirmed: 401(k) Contribution Limits to Remain Unchanged for 2010

Posted on October 15, 2009


As I wrote in a post last month, there had been some concern that, because of a decrease in certain cost-of-living measures, the IRS would decrease the maximum amount that individuals would be allowed to contribute to 401(k) and other similar defined contribution retirement plans in 2010.

Today the IRS announced that contribution limits for 401(k) and similar plans will remain the same in 2010. As the IRS explains (as only the IRS can):

The limitations that are adjusted by reference to Section 415(d) will remain unchanged for 2010. This is because the cost-of-living index for the quarter ended September 30, 2009, is less than the cost-of-living index for the quarter ended September 30, 2008, and, following the procedures under the Social Security Act for adjusting benefit amounts, any decline in the applicable index cannot result in a reduced limitation. For example, the limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) will be $16,500 for 2010, which is the same amount as for 2009. This limitation affects elective deferrals to Section 401(k) plans and to the Federal Government’s Thrift Savings Plan, among other plans.

The above is taken from a press release announcing the decision. The full text of the press release can be found here.