Retirement Account Contributions
The new year brings new opportunities to
save for retirement - something we all need to do. The contribution
limits for a variety of tax-advantaged retirement plans increased on
January 1, 2004.
If you participate in a 401(k) plan, you
can contribute up to $13,000 this year compared to $12,000 last year.
And if you are age 50 or older, you can make additional catch-up
contributions of $3,000, up from $2,000 last year. Remember that if
you'll reach age 50 any time this year, you can start those catch-up
contributions immediately. You don't have to wait until after your
birthday.
If you're in a SIMPLE retirement plan, the
annual contribution is now $9,000, up from $8,000 in 2003. The new
catch-up contribution is $1,500. For Keogh plans, the 2004 contribution
limit is $41,000, up from $40,000 last year.
Your maximum contribution to an individual
retirement account (IRA) didn't change this year. It stays at $3,000,
with a $500 catch-up contribution if you're aged 50 or older.
All these qualified plans offer the
advantage of tax-free compounding of amounts in the plan. Take advantage
of this year's increase in contribution limits to build a healthier
retirement nest egg. If you need more information, give us a call.
Return to 2004 Tax Tips
