Individual Contributions

• Individual investors are allowed to contribute $16,500 per year to their 401(k) plan.
  
  

Catch-Up Contributions

• For 2009, if you are 50 years old or older, you can contribute $5,500 more than younger contributors, bringing the limit to $22,000 per person.
  
  

Future Limitations

• The 401(k) plan limits are indexed to inflation so these amounts will continue to rise in the future.
  
  

Withdrawing Excess Contributions

• If you contribute more than the appropriate limit to your 401(k) plan, you must notify the plan before April 15 of the next year to withdraw the money. Any excess contributions are taxed in the year the contributions were made, but any interest is taxed in the year the money is withdrawn.
  
  

Penalties

• If you fail to withdraw the extra contributions by April 15 of the next year, you must pay taxes on the money when it's contributed and withdrawn, meaning you lose the tax deductible of the contribution.