401k 2006 Limits

The 401k 2006 limits are higher than the previous year's contribution limits. The 401k 2006 limits refer to the maximum amount that can be contributed to a 401k without incurring penalties. There are two types of 401k 2006 limits that you should pay attention to. The first of the 401k 2006 limits is set by the IRS. The second of the 401k 2006 limits is set by your employer retirement plan.

What are the IRS 401k 2006 limits for Contribution?

The 401k 2006 limits or the maximum amounts you can contribute to your 401k plan, according to the IRS are:

• 401k 2006 limit - $15,000
• 401k 2006 limit for catch-Up Contribution for those over 50 years old - $5,000

These 401k 2006 limits are set by the IRS and if you violate the 401k 2006 limits, you will incur taxes and penalties.

401k 2006 limits for highly compensated employees

The rules for 401k 2006 limits for highly compensated employees are different from the rules of 401k 2006 limits for other employees. These rules and the 401k 2006 limits are to make sure that a company does not discriminate or unfairly favor its highly compensated employees. So, who qualify as highly compensated employees? A highly compensated employee is an employee who:

• was a 5% owner at any time during the current or preceding year.
• had the compensation of more than $100,000 in 2006 or $95,000 in 2005. (Note the compensation used to determine if an employee is highly compensated is the amount of compensation from the preceding year.)

Non 401k 2006 limits

Non 401k 2006 limits are shown below: