In the newly passed tax bill, there's plenty of good news for individuals investing for retirement. Indeed, the new plan raises contribution limits for IRAs, 401(k)s, and other qualified retirement plans. The new limits phase in over the next seven years:

IRAs (Traditional and Roth):

Current limit: $2000 annually
Years 2002-2004 -- $3000 annually
Years 2005-2007 -- $4000 annually
Years 2008 and beyond -- $5000 limit

Education IRAs:

Current limit: $500 annually
Year 2002: $2000 annually

401(k)s, 403(b)s, and 457 plans:

Current limit: $10,500 annually
Year 2002 -- $11,000 annually
Year 2003 -- $12,000 annually
Year 2004 -- $13,000 annually
Year 2005 -- $14,000 annually
Year 2006 -- $15,000 annually
Year 2007 and beyond - contribution limits adjusted for inflation in $500 increments

From an investor standpoint, this is very good news. Indeed, some of the best deals out there for investors are in the retirement arena, so being able to put more money into these plans will allow you to cut down on your taxes while accumulating more money for retirement.

Bottom Line: It has always been a good idea to maximize the opportunities presented by IRAs and 401(k) plans. And with these changes, these great plans just got even better.

IRAs are available at BUYandHOLD. For more information, check out the "Retirement Focus" section on the left-hand side of the BUYandHOLD home page.

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