(Editor’s Note: A correction has been made to this article since its original publication. The article has been changed to reflect the correct information.)

AVIANO AIR BASE, Italy — Servicemembers and Department of Defense civilians eligible to put money into the Thrift Savings Plan have even more reasons to do so in 2006.

Perhaps as many as 15,000 reasons.

Changes that took effect Jan. 1 do away with a maximum percentage of pay that people can put into the plan, setting a maximum annual contribution of $15,000 instead.

Depending on their individual situations, participants can put thousands more dollars into the fund each year, according to Tom Snyder, a financial counselor at the Aviano Family Support Center. They can earn more money than they would in a bank savings account, he said, because the rate of return is better.

He said many servicemembers and civilians eligible to participate in the plan could also lower their taxes by putting more money in.

“The only time they shouldn’t be (contributing) is if they have bills to pay,” Snyder said.

In 2005, participants were limited to contributing a maximum of 10 percent of their base pay to the fund. But that provision has been eliminated.

Those deployed for long stints downrange can contribute even more of the money they earn while deployed, with the maximum annual amount capped at $44,000.

“Those are probably the two biggest [changes for 2006],” Snyder said.

But there are others.

Chris Bruce, a financial consultant at Global Credit Union, said while the maximum annual contributions to Individual Retirement Accounts remain the same at $4,000, the amount of additional money those over 50 can put in has doubled to $1,000. Referred to as catch-up contributions, that means someone 50 or older could put in $5,000 a year.

The annual contribution ceiling for 401(k) plans has risen as well to $15,000, up $1,000 from a year ago. Catch-up 401(k) contributions for those 51 or older have jumped $1,000 to a maximum of $5,000. There are eligibility requirements for both catch-up contributions.

Bruce said some things haven’t changed, though.

“If you’ve got a diversified portfolio and you’re putting money into it on a regular basis, that’s the best condition you can have for financial success,” he said.

Bruce said servicemembers should routinely monitor their investments and watch how the economy is doing as well.

Changes for 2006

Servicemembers and civilians eligible to participate in the Thrift Savings Plan can now contribute a maximum of $15,000 annually.

The maximum contribution allowable annually to a 401(k) plan has also been raised to $15,000.

Maximum catch-up contributions for those 51 and older have been raised for both Individual Retirement Accounts ($1,000) and 401(k) accounts ($5,000).

— Kent Harris

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Kent has filled numerous roles at Stars and Stripes including: copy editor, news editor, desk editor, reporter/photographer, web editor and overseas sports editor. Based at Aviano Air Base, Italy, he’s been TDY to countries such as Afghanistan Iraq, Kosovo and Bosnia. Born in California, he’s a 1988 graduate of Humboldt State University and has been a journalist for almost 38 years.

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