401k Plan Contributions Limits May Fall

The Associated Press

It's quite likely that the maximum contribution level for retirement accounts will fall next month unless the Internal Revenue Service or Congress chooses to freeze it at the current $16,500.

The level is set by an Internal Revenue Code formula that's rather complicated but based on the third quarter Consumer Price Index for all urban consumers, the CPI-U, to be released on Oct. 15.

The CPI-U represents the average change in prices over time of goods and services such as food, clothing, shelter and other goods and services purchased by urban consumers.

The CPI-U has risen from the previous year's figures every year for more than a decade.

Here are the third quarter CPI-U figures and their percent increases in parentheses, dating back to 1999, as provided by the U.S. Bureau of Labor Statistics.

1999: 501.7 (2.3 percent)

2000: 519.0 (3.4 percent)

2001: 533.3 (2.8 percent)

2002: 541.8 (1.6 percent)

2003: 553.7 (2.2 percent)

2004: 568.8 (2.7 percent)

2005: 590.6 (3.8 percent)

2006: 610.3 (3.3 percent)

2007: 624.7 (2.4 percent)

2008: 657.8 (5.3 percent)

2009: To be released Oct. 15. For the second quarter this year the CPI-U was 642.8, down 1.2 percent from 650.3 for the same period a year ago.

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Source: U.S. Bureau of Labor Statistics: http://www.bls.gov