About Retirement Account Catch-Up Contributions

Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Tax Planning Tips and other Taxes topics.

What are the retirement account catch-up contribution limits for 2005?

About Retirement Account Catch-Up Contributions

Tax year 2005 catch-up contribution limits for traditional and Roth IRAs is $500 for a total annual maximum contribution of $4,500. For 401(k), 403(b), salary reduction SEP, and 457 accounts, it is an additional $4,000 for a total annual maximum contribution of $18,000. For SIMPLE plans, the 2005 maximum catch-up contribution is $2,000 for an annual maximum contribution amount of $12,000. Contributing to a retirement account can provide significant income tax advantages. For more tax advice and planning help in determining which retirement account is best for your needs, consult with a qualified tax or financial planning professional.

Catch-up contributions are contributions made to a retirement account by individuals who are or will be 50 years old by the end of a given tax file year. These folks are allowed higher maximum contributions because they are closer to retirement than younger workers.

   

Comments

Nobody has commented on this tip yet. Be the first.



Name:


URL: (optional)


Comment:


Not finding the advice and tips you need on this Taxes Tip Site? Request a Tip Now!


Guru Spotlight
Mary White