As part of the new Tax Relief Act, Congress included several "catch-up" provisions for taxpayers nearing retirement. Although ostensibly put in to help late-starting older investors -- particularly women who may have been out of the workforce for years -- the catch-up provisions actually are available to any worker 50 years or older, even those who have maximized retirement contributions for years. Indeed, some observers believe that the people who can most take advantage of the higher contribution and catch-up provisions are wealthier taxpayers who have the extra income with which to "catch up," though there is a catch for many of them, as well.

As with many portions of the new tax act, taxpayers need to pay close attention to the new provisions in order to leverage the most from them. The catch-up provisions vary according to the type of retirement plan. The following shows the contribution limits for workers of all ages and the additional catch-up amounts for those 50 or over, by calendar year.

Individual retirement accounts. For individuals who reach age 50 before the end of the tax year, for all types of IRAs except the education IRA).

Year	All ages	Catch-up amount
2002	$3,000	$500
2003	$3,000	$500
2004	$3,000	$500
2005	$4,000	$500
2006	$4,000	$1000
2007	$4,000	$1000
2008	$5,000	$1000

Regular contribution limits and catch-up amounts will be indexed annually for inflation after 2008 and will increase in $500 increments.

The catch for wealthier taxpayers is that the Tax Relief Act did not remove or loosen the income limitations on IRAs. Thus, many wealthier taxpayers don't qualify for deductible or Roth IRAs, and therefore can't take advantage of the increased contribution and catch-up amounts. Also, all provisions, including the retirement provisions, passed under the Tax Relief Act are scheduled to expire at the end of 2010 unless Congress readdresses the act in the meantime and extends provisions.

Qualified plans: 401(k), 403(b) tax-sheltered annuities, salary reduction simplified employee pension (SEP) and government 457 plans. For individuals who reach age 50 before the end of the plan year.

Year	All ages	Catch-up amount
2002	$11,000	$1,000
2003	$12,000	$2,000
2004	$13,000	$3,000
2005	$14,000	$4,000
2006	$15,000	$5,000

Regular contribution limits and catch-up contributions will be indexed annually for inflation after 2006 and will increase in $500 increments. Furthermore, the catch-up amounts apply even if the plan's maximum contribution limit is lower than the maximum allowed by federal law. A highly paid employee also can take the maximum catch-up amount even when anti-discrimination rules prevent the employee from taking the maximum deferral allowed by federal law.

Catch-up provisions don't apply to SEP plans established after 1996. Participants in 457 plans should be aware that the catch-up rules don't apply in the their final three years before retirement, but the law already allows the doubling of contributions those final three years.

SIMPLE (Savings Incentive Match Plan for Employees)

Year	All ages	Catch-up amount
2002	$7,000	$500
2003	$8,000	$1,000
2004	$9,000	$1,500
2005	$10,000	$2,000
2006		$2,500

Contribution limits will be indexed for inflation in $500 increments, beginning in 2006 for regular contributions and beginning in 2007 for catch-up amounts.