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Employee Contributions to Retirement Plans: Phase-in Maze
Federal tax laws include changes in the maximum contributions an employee can make to IRA and employer-sponsored retirement plans. Contribution limits will increase over the next eight years. In addition, individuals over age 50 will be able to make additional “catch-up” contributions each year.
The following tables show the allowable maximum contribution for the next eight years for specific retirement plans and the catch-up contribution limits for those over age 50.
Employee Contributions to Retirement Plans
| Year |
IRA |
401(k)/403(b) |
457 |
Simple |
| 2006 |
$4,000 |
$15,000 |
$15,000 |
$10,000 |
| 2007 |
$4,000 |
$15,500 |
$15,500 |
$10,500 |
| 2008 |
$5,000 |
$15,500 + indexed to inflation |
$15,500 + indexed to inflation |
$10,500 + indexed to inflation |
Age 50 and Over Catch-up Contribution
| Year |
IRA |
401(k)
403(b)
457 |
Simple |
| 2006 |
$1,000 |
$5,000 |
$2,500 |
| 2007 |
$1,000 |
$5,000 |
$2,500 |
| 2008 |
$1,000 |
indexed to inflation |
indexed to inflation |
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