IRS Announces 2008 Contribution Limits

The Internal Revenue Service recently announced the 2008 Cost of Living Adjustments (COLA) applicable to 457 deferred compensation plans.

The base maximum contribution remains unchanged at $15,500 (in tax year 2008). This means that there was no COLA increase for 457 plans in 2008.

There is also no COLA adjustment for the age based “catch up”. The age based "catch up" remains at $5,000. This means that participants age 50 or over can contribute a maximum of $20,500 in tax year 2008.

Participants eligible for the "special catch up" maximum may contribute $31,000 in 2008.  This amount is double the base contribution maximum of $15,500.  There are qualifications that must be met to utilize the maximum "catch up" provision. Please contact ING Financial Services representative Kelly Griffith for additional information.

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