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.

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.