Roth 401k Limits for 2010

The Roth IRA account is a type of qualified retirement account that has a slightly different structure than a traditional individual retirement account (IRA). Roth 401k limits change from year to year, and in 2010, the contribution limits have changed only slightly since the previous year. Roth 401k limits are determined by several factors, including your annual income, current age and your filing status. Here’s what you need to know about the Roth 401k limits for 2010:

2010 Roth 401k Contribution Limits

The contribution limits for a Roth 401k account have not changed from 2009. This means that you can make an annual contribution of $5,000 if you are under the age of fifty, and an additional contribution of up to $1,000 per year if you are over fifty years of age.

2010 Roth 401k Income Limits

Single individuals contributing to a Roth 401k account in 2010 are subject to an income limit upwards of $120,000 per year. Married individuals who are filing their taxes  jointly can contribute $5,000 to a Roth IRA if they have a modified adjusted gross income that is below $167,000. If the married couple’s modified gross income is between $167,000 to $177,000, they can contribute an amount less than their full 401k income limit. Couples who have an income that exceeds $177,000 are not eligible to contribute to a Roth 401k in 2010.

2010 Roth 401k Catch Up Limits

In 2009, the annual contribution limit was $5,000 and the catch up limit was $1,000 for all account holders. In 2010, the annual contribution limit and catch-up limits are the same, but the limits are expected to increase by $500 to $1,000 for the following year because of inflation.

2010 Roth 401k Withdrawal Policies

Individuals who wish to make a withdrawal from their Roth 401k account in 2010 can do so without penalty at the age of 59 ½. They can also withdraw from their account and not pay any taxes on the income if they are 59 ½ years of age and/or meet some other qualifications. Roth 401k account holders who withdraw before the age of 59 ½ will be subject to withdrawal fees, high penalties and will be responsible for paying taxes on the income.

Many Roth 401k withdrawal policies and account limits change from year to year, while others stay the same. If you are considering making changes to your 401k account in 2010, make sure you are aware of all of these limits and requirements so that you can make the most informed financial decisions.

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