NU Online News Service, June 7, 4:15 p.m. – The Investment Company Institute, Washington, a trade group for mutual fund companies, says the recent enactment of the new federal tax bill will make the nation’s retirement plan system “significantly more responsive to the retirement savings needs of working Americans.”
The new tax law also will help encourage more Americans to save for their children’s education, according to Matthew Fink, the institute’s president.
Retirement and pension provisions in the tax package will raise the annual contribution limits on individual retirement plans.
The maximum contribution level for individual retirements accounts will increasedto $5,000 by 2008, from $2,000. Beginning next year, individual investors will be allowed to contribute $3,000 to IRAs. That limit will rise to $4,000 in 2005 through 2007.