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Author: Bobbcat Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75339  
Subject: Re: IRA limits Date: 6/24/2000 10:52 AM
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<<...someone who does not have a retirement plan at work .... are limited to $2000 total in their IRA contributions.

Is it just me, or does this not make any sense? ...While those who are in better financial positions can contribute much more? What's up with that?>>


It's a way to get business owners to setup plans for their employees. With hopefully employer match or employer profit sharing contributions. If they could contribute $10,000/year into their own IRA, why go through the trouble and expense to offer a plan to their employees?

Plans are neither cost-free or trouble free to the employer. Even if "cost-free" by passing through all investment and reporting expenses to the employees, there are still costs in maintaining the paperwork and payroll system.
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