re: #221 compound_Idaho

Except your employers match is not limited to $17/yr.

Are you sure of that? I’m pretty sure they’re not allowed to do more than match your own contribution. Can you cite a source for this?

In addition, it’s likely that Romney was a HCE, and so his contributions would have been even more limited— and that limits the matching funds, as well.

For 2002, you may not make 401(k) contributions or receive matching contributions for any compensation over $200,000, even if you earn more than that. The limit in 2001 was $170,000.

To better understand how this limit works, try taking the following quiz.

If you earn $220,000 in 2002 and contribute 5 percent of your salary to your 401(k), how much will your annual contribution be?

The answer: $10,000. Even though 5 percent of $220,000 is $11,000, the law says you can only make 401(k) contributions on the first $200,000 of your salary. Therefore, your contribution amount is 5 percent of $200,000, or $10,000.

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