YOUR MONEY Uncle Sam’s Gift To Savers by John Addison (NAPSA)—Whenthe Tax Relief Act of 2001 debuted last summer, Americans received $38 billion in ——rebate checks. ——But in addition —to cutting taxes, -—the bill also allowed taxpay- ers to keep more moneyfor retirement. Thanks to John Addison ——_ Uncle Sam,taxpayers can now stash hundreds— even thousands—moreinto taxadvantaged retirement plans such as IRAs and 401(k)s. Older investors can save even more. Although these benefits don’t come automatically—like simply receiving a check in the mail—they do offer big rewards for those who plan and prepare. Waiting to act on this benefit would not be prudent. Uncle Sam’s offer is set to expire in 2010 unless new laws are passed to extendit. With only a few years to maximize the tax-advantaged accounts, many people are starting their savings plan immediately. Because Americans feel increasing pressure to support themselves in retirement, Congress responded by beefing up two widely popular savingsplans. Starting in 2002, you may contribute up to $3,000 annually to a Roth or traditional IRA—that’s a 50 percent increase from previous years. You can also sock away up to $11,000 pre-tax into your employer- sponsored 401(k) or 403(b) plan. Over the next several years, plan limits will rise annually until they cap off at $5,000 for IRAs and $15,000 for 401(k)s. Both plansoffer big tax breaks and let you invest in mutual funds—one of the best opportunities for long-term growth. If you’re a late bloomer, when it comes to saving, take heart: Congress has included a special provision to help you catch up. Starting this year, Americans age 50 and older will enjoy higher contribution limits than their younger counterparts. They may contribute an additional $500 to their IRA and $1,000 to their 401(k) than the new law offers. By 2006, eligible workers can sock away an extra $5,000 into their 401(k) and $1,000 into their IRA. Over the years that can transform even the smallest nest egg into a sizeable safety net. For example, a 50-year-old who makes the maximum contribution to an IRA and 401(k) each year starting in 2002 could under maximal conditions sock away $359,000 by age 65. The financial professionals at Primerica have created a guide that shows you how to take control of your financial life. To get a copy of The Solution, write to Primerica, 3120 Breckenridge Blvd., Duluth, GA 30009, ATTN: Corporate Relations, or call 770564-6329. John Addison is Co-CEO and President of Primerica, a subsidiary of Citigroup, Inc.
