Posted on 10/20/2017 9:58:58 AM PDT by C19fan
Proposals floating around Washington to cap the amount that Americans can contribute before taxes to 401(k) plans and individual retirement accounts are unsettling professionals in the retirement industry.
Republicans are looking for ways to generate revenue to support broad reductions in individual tax rates. One idea is to limit the amount of pretax money households can sock away for retirement saving. Such a move would likely generate significant political blowback but it hasn’t been explicitly ruled out, stirring worry among industry lobbyists.
(Excerpt) Read more at marketwatch.com ...
BS!
Both are good plans if you use the proper company for the plan. If you don’t, you end up buying their crap that they don’t sell to prime customers.
My wife and I were never able to utilize a Roth. The nearest we came was a few years she had a Sep/Ira until I embarrassed the doctor group she worked for into going to 401k’s.
Our CPA for decades was a friend, she had a Roth as she was on her own. She said that with excellent corporate matching funds, the 401k’s were good, if they allowed us to basically manage the funds. I went to Fido, and eventually the group, my wife worked for set up FIDO 401k’s as an alternative.
Grade A baloney right there.
quote “Too many corporations have quit pensions and replaced them with 401k matching up to a certain percentage.”
yep! exactly !
And what’s the chance if a change like this was made that your employer would give you the money they used to contribute to the 401K ? zero.
This will never happen.
This is not a good idea. The politicians don’t like the idea of everyday people taking care of themselves independent of the government.
Thanks for the mention.
That does make sense.
The funds are generally dumped into the stock market. This bolsters the market and actually does stimulate the economy.
It would seem futile to mess with it. Expanding the amount folks could pay in would seem to be the best policy.
Others have made similar suggestions.
i would prefer they not reduce the limits
but IF THEY REALLY REALLY DO seriously reduce (and simplify!!!!) taxes, it would be very well worthwhile, yes indeed
we need a big time tax reduction and I would prefer abolishing the horrible income tax completely
income tax was sold to USA on the lie that ‘the average worker will never pay a dime in the new income tax!”
(it was one of those damned “progressive soak the rich” proposals..like Obama/HilLILARy of 1913, ha~!...progressive proposals that almost always backfire and drain the incomes of working Americans instead)
If they can’t take away our money one way, they will get it another way. Because the great majority of people in the state and federal government believe your income belongs to THEM first.
“Republicans are looking for ways to generate revenue to support broad reductions in individual tax rates.”
Instead of looking at how to generate more revenue to support tax cuts, they need to look at spending cuts to support tax cuts.
Like 100% of HUD and Dep Ed to start with, followed by massive cuts at Dep of Interior minus National Parks, most of Dep Commerce, IRS cuts with a complete low flat tax (zero exclusions, zero exemptions, zero deductions & zero credits) tax regime, large cuts at State Department, elimination of Homeland Security, reverting its constituent parts back to where they came from, and massive reductions of federal grants from all federal departments.
There is talk in Washington of the government confiscating IRA’s and 401K’s.
Yep. My brother both agree that the exception is corporate matching funds. If they do it, get a 401k and contribute only up to the maximum they match. It’s like giving yourself a raise.
Sorry, I forgot to bring that up. It’s what I did when I worked in Seattle.
BTW, a lot of people don’t know that you not only pay a penalty for taking 401k funds early, but you pay a bigger penalty once you can take the money, if you don’t take enough out. And if a significant part of your retirement income is in the form of a 401k, you could take a significant tax hit by just taking out the minimum every year.
I'm sure not going to go dabble in the stock market.
Perhaps simplify but the GOP plans are not a reduction in the sense of the tax money DC collects will stay the same. What the GOP is debating is which groups will get screwed so that other will see their tax reduced.
Grade A baloney right there.
I confess that I’ve not checked the 401k rules for several years. They may have recently made them better in some way that I am not aware of.
It certainly proved right in my case. I not only saved taxes by being in a lower federal income tax bracket, but I moved from a high state income tax to a no state income tax.
Don’t know why you say 401K’s are a rip-off as they both have their place.
Seems to me that if one is employed by a company that offers matching funds that a 401k is the way to go. In fact, I would say it should be the first option, max out the 401K before turning to other investments. The Roth is a good option for those who are self employed, retired or work for a company that doesn’t offer a 401K, usually a small company. Here’s a pretty good site that explains each fairly well. Below is a fairly good explanation of each I think.
http://www.investopedia.com/ask/answers/100314/whats-difference-between-401k-and-roth-ira.asp
“They refuse to actually cut spending”
That is because public spending is how politicians get very wealthy personally. The recipients of the spending kick back to the politicians that get it through the process. Everyone gets wealthy...except the taxpayer getting fleeced. They will never cut spending, it’s how they become multi-multi millionaires on 230K a year.
It’s a broken of governance and it can’t be repaired...only over-thrown.
Yes, the matching funds thing is the single caveat that makes them a no brainer - up to the point that funds are matched, and not a penny more. It is like giving yourself a raise. And sure, it might get taxed heavlily on the back end, but I don’t mind paying tax on free money when the alternative is to not get the money at all.
They will eventually get around to taxing it as it is earned. And then taxing it when you withdraw it, and again when you spend it and again when you die. If you have any left.
They want their future income tax on your deferred “savings”
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