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Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33167
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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The situation My wife (DOB 7/30/1947) has been offered

Resolved Question:

The situation:

My wife (DOB 7/30/1947) has been offered an early retirement and a severance payment equal to 9 months of wages plus other benefits. Retirement will be effective 9/30/2011.

We have asked to have the entire amount placed in her 401K for future use during the course of retirement. The company has said the IRS won't allow that but is unable to provide a citation they are relying on in making that representation.

(If it matters, I am on Social Security and VA Disability as my sole sources of income.)

My question is this: What would prevent us from placing the entire amount of her severance payment into the 401K? The amount is about $29,600.
Submitted: 6 years ago.
Category: California Employment Law
Expert:  Tina replied 6 years ago.
Hello and welcome,

There are maximum amounts that may be deferred in a calendar year based on IRS regulations.

Here is a link setting out the maximums:,,id=151786,00.html

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