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Yearly 401K contribution is crucial for every account holder and it is good to plan ahead for the next year to achieve your annual goal of saving. Annual changes in the max 401K contribution limits is also anticipated since the introduction of 401K. With the 2010 401K maximum contribution, account holders may be wondering why there is no increase since 2009.

The low cost of living index and inflation rate are the two of main reasons why the 2010 401K maximum contribution has not yet changed. The economy is still struggling to get back on track, so this mainly affects all financial aspects. The retirement plans given to employees are among the numerous financial programs that are hit by the economic down-turn.

With the values (of almost everything) depreciating, particularly in 2009, 401K plans consequently lost around an average of 25% in value. It was apparent that the 2010 401K maximum contribution will be directly affected - and it was.

As it was in 2009, the maximum 410K contribution per year was still at $16,500 for those who are 49 and below. The amount of catch up contribution was also at $5,500 and it is only meant for those who are 50 and above.

The best possible plan can be set-up by the IRS during these times. However, they are not the authors of the law that governs this retirement plan - it’s still the government’s decision based on the economic status. The contribution amounts are still static and worrisome because it’s already reached its third year. This goes to show that the economy is still trying to recover and the cost of living is still quite low to raise the amounts of 401K limits.

There’s nothing that you can do for now. However, it is advisable that you check the IRS website once in a while, especially during mid-year. 

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