As the year winds down, it’s time to start thinking about investment opportunities in 2008. As I’m sure you’re aware, some of the most attractive vehicles that U.S. investors have at their disposal are IRAs, which allow you to defer taxes, or grow your investments tax free. That being said, you’re limited in the amount that you can contribute to an IRA each year, and you can’t carry the unused portion of your contribution limit forward to future years.
The good news is that the contribution limits are increasing for 2008, as follows:
|Year||Under Age 50||Age 50+|
|2002-2004||$3, 000/year||$3, 500/year|
|2005||$4, 000/year||$4, 500/year|
|2006-2007||$4, 000/year||$5, 000/year|
|2008||$5, 000/year||$6, 000/year|
Note that individuals aged 50 and over are eligible for so-called “catchup” contributions, which result in a higher contribution limit. After 2008, contribution limits will be indexed for inflation (finally!) in $500 increments.