Twelve thousand dollars is so last year. If that's all you've contributed to 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 half-centenarians and beyond) is a cushy $1,500.
  • Traditional and Roth IRAs: For 2004, the limit stayed at $3,000, and the catch-up contribution limit remained $500.

Even though December paychecks can be tight, consider what a difference a few squeezed dollars now will make in the future. Upping your contributions now not only will secure a sweeter future but will 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'll 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.