Annual Addition
The maximum dollar amount that may be contributed to a participant's retirement account under a defined-contribution plan. Investopedia Says:
For instance, the maximum annual addition for a participant under a defined-contribution plan for any tax year is 100% of the individual's eligible compensation or a certain dollar limit, whichever is less. For 2005, the dollar limit is $42,000, but every new tax year this may be indexed for inflation by a $1,000 increment. Related Terms:
401(k)
Defined-Benefit Plan
Defined-Contribution Plan
Elective-Deferral Contribution
Matching Contribution
Profit-Sharing Plan
Qualified Retirement Plan |