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ICI Supports Legislation Increasing Annual
Retirement Plan Contribution Limits
Washington, DC, October 18, 2002 - The Institute strongly supports legislation recently approved by the House Ways and Means Committee that would allow Americans to save more for retirement by raising the limits on annual retirement plan contributions, according to a recent letter to House officials. H.R. 5558, the Retirement Savings and Security Act of 2002, accelerates the scheduled increases in annual contributions limits for IRAs, 401(k) plans, and other qualified retirement plans which were enacted as part of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Under H.R. 5558, the maximum contribution limits to these programs would take effect in 2003.
EGTRRA increased the annual contribution limit for IRAs to $5,000 by 2008; for 401(k)s to $15,000 by 2006; and for SIMPLE plans to $10,000 by 2005. EGTRRA also increased the amount that may be contributed to these programs annually in the form of catch-up contributions by individuals over the age of 50.
H.R. 5558 also would increase the age at which individuals are required to take minimum distributions from IRAs, 401(k)s, and other qualified retirement plans from 70½ to 73 in 2003 and 2004; to 74 in 2005 and 2006; and to 75 in 2007 and thereafter.
The full House will consider a tax package that incorporates H.R. 5558 after the November elections.