Is it possible to determine what the absolute maximum amount of money a person could have contributed to a 401K is? The law has been around for nearly 40 years, the contribution limits were always defined I would assume, and there are likely plenty of people who have had enough qualifying income to make the maximum personal contribution and receive the max employer contribution each year. Are there elements that I’m missing that might make this difficult? Obviously growth makes the theoretical maximum balance infinite, but from a strictly contribution standpoint, I’m curious to know if this number can be arrived at. Any thoughts?
You just have to search for the maximum contribution limit allowed each year. For example, in 2015 it was $53,000 total with a maximum of $18,000 for the individual.
I guess the part that I did a poor job of asking was, is that it? Were there ever any other loopholes of any kind, any weird language in the early days or anything that would have allowed someone to make massive contributions at some point?
You could place a hugely undervalued asset into your IRA, and then have it appreciate 50x. Mitt Romney has $20 million in his retirement account… somehow…
Assuming you own a business somehow, you can always put into a cash balance plan or a defined benefit plan. The cap is based on $265k of salary, but I’ve seen people put in $500, 600, 800k into one of these plans, and they (and their spouse and kids) usually get ~95% of the benefit. (The other 5% goes to their employees.)
If you’re curious how Mitt Romney has that much in his IRA, I suspect it has something to do with a self-directed IRA, which I don’t do and know little about. But if you know somebody who can custody one for you, you can make a lot of money (assuming you have a good investment).