Annual Addition

Dictionary Says

Definition of 'Annual Addition'

The total dollar amount contributed in a given year to a participant's retirement account under a defined-contribution plan. An annual addition is the sum of employer contributions, employee contributions and forfeitures in a particular year. The annual addition is subject to a maximum limit. This annual addition limit is the lesser of 100% of the participant's compensation for the year or the dollar limit in effect for the year. The annual addition dollar limit was fixed at $49,000 for each year from 2009 to 2011.
Investopedia Says

Investopedia explains 'Annual Addition'

Certain amounts credited to a participant's plan are not considered as annual additions. These include "catch-up" contributions, rollover contributions and loan repayments. In addition, employee contributions transferred from a qualified plan to a defined contribution plan do not count towards the annual addition.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Defined-Contribution Plan

    A retirement ...
  2. Defined-Benefit Plan

    An ...
  3. 401(k) Plan

    A qualified plan ...
  4. Qualified Retirement Plan

    A plan that ...
  5. Elective-Deferral Contribution

    A contribution ...
  6. Matching Contribution

    A type of ...
  7. Profit-Sharing Plan

    A plan that ...
  8. 403(b) Plan

    A retirement ...
  9. Pension Plan

    A type of ...
  10. Recharacterization

    The treatment of ...

Articles Of Interest

  1. New Retirement Plan Limits For 2011

    New changes to the law can have a huge impact on your nest egg.
  2. The 401(k) and Qualified Plans Tutorial

    Learn about eligibility requirements, contribution to and distribution rules for these retirement plans.
  3. Common Questions About Retirement Plans

    We offer some solutions for the individual taxpayer as well as the small business owner.
  4. Retirement Savings Tips For 35- To 44-Year-Olds

    Learn how the "sandwich generation" can save for retirement while taking care of their kids and parents.
  5. 6 Retirement Savings Tips For 45- To 54-Year-Olds

    Now is the time to kick savings into high gear. Find out how.
  6. 5 Ways To Stretch Your Retirement Budget

    Living comfortably can be easy if you follow a simple plan.
  7. Saver's Tax Credit: A Retirement Savings Incentive

    Here's another reason to put money toward your retirement nest egg.
  8. Retirement Plan Tax Form 5329: When To File

    Read this if you've taken early distributions or owe excess-contribution or excess-accumulation penalties.
  9. After-Tax Balance Rules For Retirement Accounts

    Accumulating post-tax assets can work to your advantage. Find out how.
  10. Retirement Plan Tax Form 8606: When To File

    If you have a Roth IRA, you are responsible for keeping track of your pretax versus after-tax assets.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center