Save More in Retirement Plans in 2006
The contribution limits for retirement savings plans will rise in 2006. For 401(k) and 403(b) plans, salary reduction SEPs, or 457 plans, you can contribute up to $15,000 in 2006. Those in SIMPLE plans can contribute up to $10,000 in 2006. Catch-up contributions also rise to $5,000 for retirement plans other than SIMPLEs and $2,500 for SIMPLEs. Overall contributions to defined-contribution plans cannot exceed $44,000 in 2006 (up from $42,000).

If you save in IRAs, the contribution level doesn’t change in 2006: You can still contribute up to $4,000. But the catch-up contribution increases to $1,000 (up from $500). That means if you are age 50 or older, you can contribute up to $5,000 to a traditional or Roth IRA.

Morningstar gives us a Planning Preview for 2006