Save Like It's 2004

Twelve thousand dollars is so last year. If that's all you're planning to put in your 401(k), 403(b), or 457 account, you might want to check your calendar.

Right after Father Time rang in 2004, Uncle Sam celebrated by increasing contribution limits on retirement savings accounts. In case you were distracted by the fireworks and flowing bubbly, here are this year's limits:

  • 401(k), 403(b), 457 accounts, and SARSEPs: The annual contribution limit in 2004 is $13,000. For those 50 and older, you can make a catch-up contribution of $3,000.

  • SIMPLE plans: The contribution limit is $9,000, and the catch-up contribution (again, for the half-centenarians and beyond) is a cushy $1,500.

  • Traditional and Roth IRAs: For 2004, the limit will stay at $3,000, and the catch-up contribution limit will remain $500.

Is your paycheck already stretched too thin to take out more? Consider the new realities of retirement. Motley Fool Rule Your Retirement pro Robert Brokamp fears that too many of us are operating under old assumptions about retirement. As he told David and Tom Gardner in a recent interview, those who base their savings strategies on how their parents retired are in for a few rude surprises. Sure, we may be living longer than any previous generation, but few companies today offer pensions, and systems such as Social Security just were not built to sustain people for 30 years.

Upping your contributions now will not only secure a sweeter future but also reward you with tax savings today.

If you have money taken out of your paycheck and deposited in a retirement account, and that amount is based on 2003 limits, contact your human resources department and have the amount changed. Take a moment right now and open an IRA (we show you how). If you're behind on your savings, "catch-up contributions" can go a long way to building a more beautiful retirement. If you're 50 and up, go ahead and invest like your age.

Wondering whether you'll be able to live a leisurely life after leaving the working world? Stop wondering if your savings will sustain you in the future and start getting answers. For new strategies for the new retirement order, let The Motley Fool's Rule Your Retirement newsletter accompany you into your golden years. Take afree 30-day trialnow and see how your future looks.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 509081, ~/Articles/ArticleHandler.aspx, 5/30/2017 7:22:43 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 days ago Sponsored by:
Change down DOW 21080.3 -2.7 0.0%
Change up S&P 500 2415.8 0.8 0.0%
Change neutral NASD 6210.2 0.0 0.0%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes