Guidelines for Retirement Savings

Below are the updated guidelines for retirement savings

For 2007, the maximum amount you can contribute to a 401(k) plan increases to $15,500 from $15,000 in 2006. If you're 50 or older by the end of the year, you can stash away an additional $5,000, for a total of $20,500.

The maximum contribution limits for individual retirement accounts remain the same: $4,000 if under age 50, and $5,000 if you're 50 or older this year.

Among other changes, the income limits rose for making contributions to a Roth IRA. For joint filers, the amount you can contribute phases out if your income is between $156,000 and $166,000, up from $150,000 to $160,000 in 2006. For most singles in 2007, the range has increased to $99,000 to $114,000. For 2006, it was $95,000 to $110,000

Traditional IRA May qualify for tax deduction

Can contribute up to $4,000 in 2007 ($5,000 if you're 50 and older)

Can take money out for qualified events without penalty

Taxed as income when you start taking distributions

Can start taking money regularly at 59½

Have to start taking money out at 70½

Can't contribute after 70½

Roth IRA Can contribute up to $4,000 in 2007 ($5,000 if you're 50-plus)

No tax deduction

Can take out the money you've contributed at any time without penalty

Can withdraw earnings after five years for qualified events

Money not taxed when you take it out at retirement

Don't have to take distributions at 70½

Can contribute past 70½

Income limit: $95,000 to $110,000 for singles; $150,000 to $160,000 for married couples

401(k) Contributions taken out of paycheck.

Can save up to $15,000 in 2006 ($20,000 if you're 50-plus)

Can retire as early as 55

Don't have to take distributions at 70½

Can contribute past 70½

Federally protected from creditors

Limited to the plan your employer designs/selects

May or may not be able to borrow

May or may not have matching contributions from employer

Matching may be vested

SIMPLE IRA Contributions taken from paycheck.

Can contribute 100 percent of income up to $10,000

Employer matching

Immediately vested

Option for self-employed

SEP-IRA Employees can contribute up to $44,000 in 2006

Functions like an IRA

Option for self-employed

No annual reporting

Solo 401(k) Can contribute 100 percent of income up to $15,000 in 2006 ($20,000 if you're 50-plus)

Option for self-employed

Additional paperwork and tax forms required