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Administration July 12, 2003
About Half Eligible for "Catch Up" Do – So Far: Fidelity
December 19, 2002 (PLANSPONSOR.com) -Some 56% of
eligible 401(k) participants at large and mid-sized plans
administered by Fidelity Investments have taken advantage of
EGTRRA's catch-up provision.
Reported by Fred Schneyer
At the same time, 93% of the more than 26,000 employer sponsored retirement plans at Fidelity are offering the provision, which allows workers age 50 and older to invest an additional $1,000 in their workplace retirement plan in 2002, Fidelity said.
It gets better in coming years. The EGTRRA provision allows an extra $2,000 next year, with subsequent $1,000 per year hikes until the catch up limit reaches $5,000 in 2006.
Retirement savers also have until April 15, 2003 to take advantage of increased maximum and catch-up contribution limits for Individual Retirement Accounts for the 2002 tax year, currently set at $3,000 and $500, respectively.
Maximum annual and catch-up contributions for IRAs will remain at $3,000 and $500 through tax year 2004, respectively.
Annual IRA contribution limits will increase to $4,000 for tax year 2005, while the IRA catch-up limit will increase to $1,000 for tax year 2006.