As an example, Falconer said the maximum
tax-deferred contribution to a 401(k) is $10,500.
This 401(k) provides higher
tax-deferred contribution limits than other common retirement options and, when offered within our variable annuity products, is an ideal solution for individuals who want an innovative, guaranteed living benefit that can establish a steady lifetime income stream in retirement.
Traditional Individual Retirement Account (IRA) - Allows qualifying individuals to annually make a $2,000 tax-deductible and
tax-deferred contribution toward their retirement.
Tax-deferred contributions (federal and state income tax, where applicable),
Catch-up contributions are additional
tax-deferred contributions and are separate from regular TSP contributions.
A solo or self-employed 401(k) combines a profit-sharing plan with a 401(k) plan and allows a sole owner-employee to make greater
tax-deferred contributions than would be permitted under the others.
The plan, called the Enterprise Individual(k), offers certain small, owner-only businesses a new choice for their retirement savings by allowing up to $40,000 in
tax-deferred contributions.
Most Americans are now familiar with 401(k) plans epitomized by employee
tax-deferred contributions (often with a company match).
Individuals who choose this option can supplement their individual accounts with additional
tax-deferred contributions.
The statutory yearly limit on
tax-deferred contributions to a 401(k) plan is $8,475--not much for a highly compensated executive.
6) The reason for the variance in allowable maximum percentages contributed is the Internal Revenue Code's restrictions on
tax-deferred contributions.
Recent legislative changes and the desire to accelerate retirement savings have generated higher demand for Cash Balance Plans, which allow employers to make large
tax-deferred contributions.
