American workers have a problem saving for retirement, but it’snot getting fixed by higher limits on how much they can contributeto their 401(k) plans.

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Those are the conclusions of a new study from the Center forRetirement Research at Boston College that looked at 401(k)contribution patterns of people both under and over the age of50.

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Researchers wanted to see how changes made by Congress in 2001to tax-deferred contribution limits affected how muchpeople contributed to their retirement plans. The group under themicroscope, so to speak, included individuals aged 46–53, and theperiod considered fell between 1999 and 2005, just before and afterthe adoption of the catch-up provision.

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Congress’s action raised tax-deferred limits on 401(k)contributions between 2001 and 2005 from $10,500 to $14,000 forpeople under the age of 50, and from $10,500 to $18,000 for people50 years old and older. Anyone can contribute up to $18,000annually to a 401(k) plan; people over 50 also can make a catch-upcontribution of $6,000, allowing them to put away a total of$24,000.

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The higher limits, after all, were thought to be a way to solvethe problem of how to get Americans to put away more money forretirement. But the study’s results indicate the increased limitsdidn’t result in a statistically significant improvement among themajority of workers. People who previously hadn’t approached thelimits didn’t increase their contributions in a statisticallysignificant way.

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Instead, the new limits mostly affected less than 10 percent ofworkers: people who were in higher income brackets withmore disposable income, who would have saved more early on if theycould have and were prevented from doing so by existing limits.This group took advantage of the tax incentives offered along withthe higher limits and increased their 401(k) contributions, withpeople over 50 doing so at a greater rate than those under 50 andavailing themselves of the benefits of the catch-upcontribution.

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On the other hand, those who never approached the earliercontribution limits didn’t substantially increase the amount theysaved.

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The study also found that it was questionable whether thosehigher-income older workers who substantially increased their401(k) savings increased their savings overall, or simply movedmoney from one form of savings to another in order to takeadvantage of the tax benefit offered by the higher contributionlimits.

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