Americans saving for retirement are poised to invest as much as $39 billion in IRAs in 2002 -- nearly $8 billion more than expected for tax year 2001 -- as a result of increased contribution limits now in place.

Fidelity's survey revealed that more than 70 percent of Americans saving in IRAs are likely to increase their contributions and save more for retirement. Investors age 49 and younger can now save up to $3,000 in 2002, compared to the old limit of $2,000 and those age 50 and older can now save up to $3,500. In addition, two out of three survey respondents who reported they regularly contribute the maximum to their IRA are likely to save the full contribution now allowed.

“Investors clearly recognize the tremendous opportunity to accumulate more for their retirement years,” said Dale Bearden, senior vice president, Fidelity Brokerage Company. “The new contribution limits have been in effect for just two months and already we've seen the average IRA contribution jump to $2,195 from $1,627, a 35 percent increase from last year at this time. ”

Those closest to their golden years are likely to save even more in their IRAs thanks to the new catch-up provision allowing investors age 50 or older to save an additional $500 in 2002. Nearly two-thirds (64%) of those surveyed age 50 or older are likely to increase their contribution, half of whom intend to meet the maximum contribution limit of $3,500 for 2002.

The survey also reported good news for American savers who are the farthest from retirement. An overwhelming 79 percent of those under age 30 report making regular IRA contributions each year. In addition, 82 percent indicate they are likely to increase their IRA contribution for 2002 to save more for their retirement years. 

To add your voice to Letters to the Editor, write editor@smartpros.com. All letters become the property of SmartPros and may be edited for space, clarity, relevance and fairness upon publication. Read the most recent Letters to the Editor.