Raising Roth IRA contribution limit from $2,000 to $5,000

[Guest Hampton]

I read in some financial magazine (Kiplingers, I think) that Sen. Roth had introduced a bill that would increase the amount you could contribute to your IRA from $2,000 to $5,000. Does anyone know the status of this bill, or if it is likely to pass? Would increase the limits for 1999 contributions? Thanks.

[Guest John R Grossmann]

I would call it the trial balloon stage. The remaining months of 1999 will feature a struggle between the Clinton admin and Congress over the budget "surplus". Some of the proposed IRA changes include increasing the annual max, creating a two step max so older taxpayers can set aside more, extending the 4 yr averaging for Roth conversions, and moving income threshold higher for Roths and/or conversions. There are also proposals to partially privatize social security -- creating some mechanism so that taxpayers could invest form SS $ in equity markets. It is too early to tell what might finally emerge. Some very sensible ideas may get killed off because of the residual hostility between the Republicans and Democrats.

[Guest cebrooks]

The operative word "surplus" has taken on a new meaning since Webster's was last published. There is no "surplus". We just owe less on our childrens' future.

[This message has been edited by cebrooks (edited 02-15-99).]

[This message has been edited by cebrooks (edited 02-15-99).]

[Guest greymann]

I think an increase, probably to $4,000, in the IRA contribution limits will become law this year. There is a lot of pressure behind this from the lobbying groups, and keep in mind that the limits have not changed since 1981. On the political front, Clinton is very interested in his legacy (FWIW), so he may break with the liberal wing of his party on this issue.

[John G]

A short note to your Congressman and Senators would be useful. Use the internet and tell your elected officials what you think about the $2K limit, income thresholds, Roth conversion rules (income, 4yr average), and of course privatization options for social security.