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Author: Draggon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: SIMPLE COLA Date: 3/15/2001 8:02 AM
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Long-time lurker, first-time poster...

Somehow the fact that the SIMPLE IRA contribution limits were raised to $6,500 a year starting in 2001 had eluded me until yesterday. I really don't want that kind of thing to happen in the future.

I read IR-2000-082 (http://www.irs.gov/news/nandf.html) and I see where the limit was raised, but it's not in 'clear English' that that is what they are doing. In particular, this statement bothers me:

However, these limitations may be affected by pending legislation awaiting action by Congress. If this legislation is enacted before the end of the year, some of the cost-of-living adjustments described below may be modified, and the IRS will announce any modifications as soon as possible.

I'm surprised that this information isn't available in a more 'accessible' format, like Pub 553 (which shows a Jan 2001 revision date, btw, so it seems it should be in there). There are still several professional websites out there that say the limit is $6,000, but there are also several that say it's been raised.

Are changes like this one announced officially (and broadly) somewhere that I'm not aware of?

Thanks for your time,

Draggon
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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 48451 of 121061
Subject: Re: SIMPLE COLA Date: 3/15/2001 8:40 AM
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Are changes like this one announced officially (and broadly) somewhere that I'm not aware of?

There are many provisions, this one included, that are indexed to inflation. When the third quarter Dept. of Labor numbers are out, IRS makes the calculations and issues the next year's numbers. Unfortunately they can't control what people do with them. If you check recent announcements in November at the IRS site, you'll find it quickly.

The SIMPLE limits gave IRS special problems in 2000 because of pending legislation. They need to get the numbers out, but in this case they also needed to include the caveat that pending legislation might change them. There's really nothing you can do in a case like that except track the legislation.

Phil Marti

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