Like many on this board, I have my retirement accounts projected for the next several years. I was updating this number and noticed a footnote in a chart I was looking at saying that 401(k) and IRA contribution limits would revert back to 2001 levels in 2011. I am not eligible for the catch-up contributions (yet), but I also got the idea that these would no longer be available in 2011. Am I reading old information? Would the government really put these limits back down? I'm just trying to figure out how to plan since we would like to take as many tax advantages as we can while saving for retirement.Thanks in advance-4
Am I reading old information? Would the government really put these limits back down? I'm just trying to figure out how to plan since we would like to take as many tax advantages as we can while saving for retirement.To the best of my knowledge, that is still accurate information. However, my assumption would be that the government will evaluate this prior to 2011 and extend the timeline but we cannot be sure about that.dt
I wouldn't allow any of the potential changes to throw off your plan. I see people speculating on other boards that the income tax may go away in the future, so that people shouldn't contribute to ROTH accounts so as to take advantage of the tax write-off now while taxes exist. It seems unlikely that Congress will allow the limits to be lowered, but who knows. There is so much craziness in the political arena that anything is possible. Most likely outcome seems to be status quo for these types of issues with contributions earmarked for inflation.This is ALL speculation. Nobody can see the future. The best strategy is to keep it simple.Put away as much money as possible in tax advantaged accounts. Go to taxable accounts after you max out tax advantaged. Don't let any of the potential noise distract you from this. Following those simple rules will be the best way to meet your future goals.Just my two cents...
You should be glad to know that on August 3, 2006, the Senate approved--without change--the House version of the Pension Protection Act of 2006, sending the legislation on to President Bush for his signature. The law ends the uncertainty by making permanent the IRA and pension provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which had been scheduled to expire at the end of 2010.
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