Will 401(k) Contribution Limits Fall?

Forbes reports:

Another result of deflation: Next year, Americans may not be allowed to stash as many dollars in their company 401(k)s or in retirement plans for the self-employed.

Contribution limits for these plans, like many provisions of the tax code, are adjusted annually for inflation. So the $16,500 maximum an employee can contribute to a 401(k) for 2009 represents a $15,000 limit written into the law for 2005, and then adjusted for inflation. The $16,500 maximum covers employee contributions to both pre-tax 401(k)s and after-tax Roth 401(k)s, but not employer contributions. Workers 50 and older are allowed to contribute an additional $5,500 in 2009.