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| Economy |
| Financial industry worried GOP tax plan will change 401(k)s |
| 2017-10-21 |
| [The Hill] Financial industry groups and Democratic lawmakers are concerned that Republicans’ forthcoming tax-reform bill could make a big change to the taxing of retirement funds. Stakeholders say they’ve heard that Republicans are considering significantly lowering the amount of money people can tuck into their traditional 401(k) plans on a pre-tax basis. Currently, people can contribute up to $18,000 annually to their traditional 401(k) plans. Those contributions are paid before taxes, meaning people don’t pay taxes on the money until they pull it out of their account. The potential change that people following the tax bill are hearing about would lower the maximum annual contribution to $2,400. Amounts over $2,400 could be put into Roth 401(k)s, where the money is taxed upfront but not when it’s withdrawn. It’s unclear how seriously lawmakers are considering reducing the cap on pre-tax contributions to 401(ks). But industry groups are worried that dramatically lowering the cap on pre-tax contributions would reduce the amount that people save for their retirement. |
| Posted by:Besoeker |
| #5 But industry groups are worried that dramatically lowering the cap on pre-tax contributions would reduce the amount that people save for their retirement. Saving at @.0001% interest |
| Posted by: Skidmark 2017-10-21 14:11 |
| #4 ...and capital gains! |
| Posted by: Raj 2017-10-21 12:32 |
| #3 I have a better idea - exempt interest and dividends from taxation. All this discussion disappears. |
| Posted by: Raj 2017-10-21 12:31 |
| #2 If the GIVERnment really wants to do good by the people as it relates to 401k retirement they should encourage wealth building by the working class: 1. Have unlimited tax deferred savings until a maximum level based on year of birth. Get people to the build a sizable nest egg as quickly as possible. 2. Remove the tax deferred benefit once the balance reaches and stays above the max. 3. Place large penalties for early withdraws by not allowing benefit to return if withdraw is post-maximum reached For example: if born in 1980 you can save up to 1 million. If you withdraw 200k early, pay the penalty and your new max is 800k. This will encourage saving early and often but also stop taxpayers from subsidizing those that no longer need the tax deferred benefit while building wealth. |
| Posted by: airandee 2017-10-21 09:04 |
| #1 Why would a federal government which has absolutely no concept of fiscal accountability, saving money, or thrift encourage it's citizens to save for retirement, or for anything else for that matter ? |
| Posted by: Besoeker 2017-10-21 07:39 |