On August 17, 2006, President Bush signed a major new law on pension plans. The law includes some provisions that will affect the rules for retirement savings. You may feel the impact of these changes in the months and years ahead. The changes include:
- Making permanent the higher contribution limits for IRAs, 401(k) and SIMPLE plans, as well as the concept of catch-up contributions for older workers. These higher limits were introduced in 2001 but were due to expire at the end of 2010.
- Giving you the option to have next year's tax refund deposited directly into an IRA account.
- Allowing active-duty members of the Reserves to make penalty-free withdrawals from IRAs and other retirement plans.
- Extending the ability to make hardship withdrawals from 401(k) plans to cover all named beneficiaries, not just spouses.
- Encouraging enrollment in 401(k) plans. For example, if you change jobs you might find yourself automatically enrolled in the new company's 401(k) plan with preset payroll deductions. You'll have the ability to change or opt out, but if you don't, you'll automatically start participating.
For more details of these changes, please contact our office. We’ll be happy to provide additional information tailored to your specific situation.
Questions for our Financial Expert?
E-Mail us at:
finance@ClevelandSeniors.Com
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