Posted on 10/27/2017 12:11:06 PM PDT by rb22982
...The chairman of the House Ways and Means Committee, said he has talked to President Donald Trump twice this week about 401(k)s.
"He'd like to raise the limits so people can save more in those plans. So do I. I think that's a good start," Brady said.
...The amount workers can contribute to a 401(k) rises to $18,500 next year, up from $18,000 in 2017. People age 50 and older can tack on a so-called catch-up contribution of $6,000.
But lawmakers are now looking at raising that limit to $20,000 or more.
Yeah, there have been hysterics.
However, something is up, just not something as dramatic as people imagined.
No, IDK what, maybe an income limit or something to urge people into ROTH type plans.
The higher the better.
ROTH plans have a much lower limit.
Unless your work limits it, you can contribute the same amount to a Roth 401k as a traditional 401k. The aggregate limit for both is $18k this year and $18.5k this year before employer match (up to $53k with match)
18.5k NEXT year (barring any change by congress)
So they're considering raising it and they're considering lowering it. We'll see which wins in the end.
An outstanding idea.
My work doesn’t have a Roth option. I put the max in my personal Roth and the max in the conventional.
“All the FREEPers clutching pearls the last few days can take a break. “
What????
You mean the gaggle of anti-Trumpers joyously posting fake news from ultra-lefist anonymous sources that Trump was going to sign a bill that destroyed 401(k) plans WERE WRONG??????
“All the FREEPers clutching pearls the last few days can take a break. “
They aren’t FReepers, they are liberals.
Why is the gov’t determining how much money I can save?
They aren’t. That just determines how much money you can save and skirt taxes at the same time.
This article is why.
GE (Greedy Executives) forced employees to invest in 401(k) plans which IT administered: picking up management fees while underperforming.
And “fiduciary duty” means the companies have to monitor underperforming funds and winnow the poor ones, rather than choose the fund based on which funds salespeople provide the hottest $1,000/hr callgirls to the executives making the decision /snark>
Lawsuit alleging General Electric ripped off its workers shows the pitfalls of 401(k) plans
This article is why.
GE (Greedy Executives) forced employees to invest in 401(k) plans which IT administered: picking up management fees while underperforming.
And "fiduciary duty" means the companies have to monitor underperforming funds and winnow the poor ones, rather than choose the fund based on which funds salespeople provide the hottest $1,000/hr callgirls to the executives making the decision /snark>
Lawsuit alleging General Electric ripped off its workers shows the pitfalls of 401(k) plans
Its possible they did this, but it is small, small potatoes to GE’s total revenue. Usually you are talking like .35% vs .70% of revenue and its usually passive vs actively managed funds. The debate rages on. Lawyers are the only ones that win in those lawsuits, though.
It sure as hell made a difference to their employees who got stiffed.
Note that GE's stock has FALLEN significantly over the last 15 years; note also the Jeff Immelt, for all his offshoring to CHINA the ENTIRETY of the GE Medical Imaging "to save costs".
Now GE is talking of cutting their dividend: and they've been on the S&P 500 since 1896 IIRC. And all his "Green" posturing...
Well, Immelt not only flew a private jet everywhere; he had an EMPTY identical jet fly behind it (and go to another area of the airport to prevent gossip) just in case something went wrong with the first jet.
Oh, and to top it off: the jets he flew didn't even use GE engines, but Rolls-Royce engines.
Forced confiscation of his entire estate,and selling himself, his heirs, and assigns, into slavery to ISIS, would be too good for him.
It probably didn’t make as much of a difference as you think for average person. Trump actually delayed this implementation more broadly (in favor of firms like GE) a couple months ago. More and more 401ks are shifting to passive index funds with or without lawsuits. Choices are always good and investing costs were coming down significantly over the last 30 years even without passive funds.
Here's an excerpt:
The consequences for employees can be immense. From 2011 through mid-2016, the lawsuit says, a $1-billion investment in Fidelity’s Overseas fund would have grown to $1.57 billion. The same investment in GE’s International Fund, 90% of which was owned by GE’s 401(k), grew to only $1.22 billion, a relative shortfall of more than $300 million. Fidelity’s fund wasn’t offered to GE workers. A five year cumulative return of 57%, vs. a five year cumulative return of 22%.
That's *huge*.
If it were a passive fund, it's kinda hard for a passive fund to underperform the index that badly.
And GE Asset Management was sold by the Greedy Executives to State Street:
GE profited from this arrangement in two ways, according to the lawsuit. The company pocketed the investment management fees paid by its own employees, and it exploited its employees as a customer base for the funds — the 401(k) plan accounted for more than 70% of the ownership of all five funds and 90% of one, an international equity fund. The value that ownership gave the funds contributed to the $485 million GE pocketed when it sold its investment subsidiary, GE Asset Management, to State Street in mid-2016, the lawsuit implies.
So it was basically the GE Company store, run for the benefit of management, at the expense of employees.
Passive = index lol - its passive vs non-passive. Fees do NOT make up a 30% difference in a few years. You are talking 1-3% in 5 years time. Relative performance in an international fund can generate that wide of a discrepancy. For example - invest in Asia and Euro grows faster? Underperform. Opposite is true. Throw in markets like Brazil, China, large cap small cap etc and the variation on international funds is MASSIVE.
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