IRA Contribution Limits Increased:
| 2002-2003 |
$3,000 |
| 2005-2007 |
$4,000 |
| 2008 |
$5,000 |
Catch-up contributions for tax payers over age 50 (an additional
contribution allowed):
| 2002-2004 |
$ 500 |
| 2006 |
$1,000 |
401K & 403B Deferral Limits Increased:
| 2002 |
$11,000 |
| 2003 |
$12,000 |
| 2004 |
$13,000 |
| 2005 |
$14,000 |
| 2006 |
$15,000 |
| 2007 and later Inflation Adj. in $500 increments. |
SIMPLE plans:
| 2002 |
$ 7,000 |
| 2003 |
$ 8,000 |
| 2004 |
$ 9,000 |
| 2005 |
$10,000 |
Catch-up contributions to 401K, 403B and SIMPLE plans allowed for tax payers
age 50 and over as follows:
| 2002 |
$1,000 |
| 2003 |
$2,000 |
| 2004 |
$3,000 |
| 2005 |
$4,000 |
| 2006 & after |
$5,000 |
From 2002 through 2006 lower-income tax payers will be eligible for a nonrefundable credit for contributions to certain retirement plans. The
qualifying plans are IRAs (both traditional and Roth), 401K elective
contributions, Sec. 457 plans, SIMPLE or SEP plans, and voluntary after tax
employee contributions to qualified retirement plans.
After 2005, 401K or 403B annuity plans will be allowed to include a “qualified
Roth contribution program.” This would allow the taxpayer to designate a portion
of their elective deferral as a Roth contribution. This portion of their
deferral would be taxed to them currently. The distributions from this portion
of their program would be entirely tax free.
