2009 Contribution Limits

Employer Sponsored Retirement Plans
Elective Deferral Limit – $16,500
Catch-Up Contribution Limit (50 or older) – $5,500
Max Compensation Limit – $245,000
Highly Compensated Employees – $110,000
Key Employees – $160,000

Individual Retirement Accounts
Elective Deferral Limit – $5,000
Catch-Up Contribution Limit (50 or older) – $1,000

Health Savings Account
Coverage for Self – $3,000
Coverage for Family – $5,950
Catch-Up Contributions (55 or older) – $1,000

The contribution limit for the IRA’s may be more, but looking at the IRS site, I wasn’t able to see a change in the limits. I know for sure that they don’t plan on raising the Catch-Up Contribution.

I already did my annual elections at work and the one thing I do know is that I will be maxing out my Health Savings Account for the year. I don’t really go to the doctor that often (usually), but I have 3 prescriptions that I fill each month. If I didn’t have those medications, I would be saving a lot more money in my HSA. I’ve been thinking about getting rid of the one, which would drop my medication bill quite a bit – around $70-$80, I think. A friend of mine at work has the HSA as well, but he never goes to the doctor, so he’s basically using the HSA as another Retirement Account, which is definitely a smart move. You get to put away another $3,000 tax-free and it continues to rollover each year with maxium dollar amount. After you reach age 65, you can take funds out of the HSA for any reason (not just medical) and you will not be charged the 10% additional tax. I think anyone who doesn’t have children and tend to stay healthy for the majority of the year, should look into starting an HSA.

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