Contributions Answers

How much money can I contribute to my 401(k) each year?

The Internal Revenue Service sets an annual maximum contribution limit for 401(k) accounts. The limit is adjusted periodically for inflation. For the 2007 tax year, the maximum pre-tax contribution you can make to all 401(k) plans is $15,500.

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What if I had two different jobs and contributed more than the IRS allows for this year?

If you've gone over the $15,500 limit for 401(k) contributions for the year 2007, contact your employer's benefits department as soon as possible to correct the error. You must have the excess amount refunded to you before April 15 of the year following the calendar year in which you paid too much. Otherwise, you may have to pay a 10% penalty on the amount, along with federal, state, and local taxes.

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How do I change my contribution rate?

Typically, all you need to do is submit a change form indicating your new contribution rate. If we administer your company's plan you can submit your change via our web site, voice response line or facsimile. We cannot take verbal instructions; however, we're happy to assist you if you have any questions.

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Can I stop contributing to my 401(k)?

Yes, many plans allow you to cancel your contributions at anytime. However, if you stop contributing you may have to wait awhile before you can resume contributions to the plan. To reinstate your contributions you should submit a new enrollment form indicating your new contribution rate during your plan's next open enrollment period.

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