Posted on 11/02/2024 4:38:03 AM PDT by Libloather
Older workers can now put more savings than ever into their 401(K) accounts, under new rules starting in 2025.
Every year, the Internal Revenue Service (IRS) announces the maximum amount savers can put in their workplace retirement account, which is adjusted for inflation.
Americans over the age of 50 are also able to put extra cash into their retirement savings with catch-up contributions.
From next year, workers specifically between the ages of 60 and 63 will have a higher catch-up contribution limit, the IRS announced Friday.
The change is designed to help boost the savings pots of people in their early 60s, who may not have put enough money away earlier in their lives or may have dipped in and out of the workforce to have a family.
Starting in 2025, workers between the ages of 60 and 63 can make a catch-up contribution of up to $11,5000 into their 401(K).
This means that people who turn those ages sometime during next year will be able to put up to $34,750 into their workplace retirement plans.
That is about 14 percent more than in 2024, and marks the biggest change to 401(K) contribution rules in two decades, The Wall Street Journal reported.
The change comes amid a series of inflation adjustments made by the IRS, which the tax authority does every year.
It also announced the maximum amounts people of every age can save into their retirement accounts in 2025.
Americans aged under 50 can contribute up to $23,500 to their 401(K) plans next year - which is up $500 from 2024.
Those aged between 50 and 59 can contribute $31,000 overall, those aged between 60 and 63 can add $34,750 and over-64s can add $31,000.
(Excerpt) Read more at dailymail.co.uk ...
Doesn’t seem fair. Those of us that have been diligent for decades don’t get the same as those who aren’t. Doesn’t matter what their situation is or was.
My idea-UNLIMITED contributions to a ROTH until one gets to $300k or so. Install a consumption tax and eliminate the income tax. No tax on IRA investments. Allow family members to contribute to their relatives accounts.
Deep State loves ginning up games of lets-you-and-him-fight.
I gently suggest folks refuse to play.
To the folks who might benefit from Deep State’s latest ploy...
What Deep State giveth, Deep State can taketh away.
Just something to keep in mind.
Don’t know what I’m getting at?
Read the British tabs.
median income ~$64K
median rent ~$2K
so if the median worker can park $6K a year into a 401K they’re doing good.
Many don’t have $1K to cover emergencies.
$34K Catch up?
Great for those that can do it.
Most can’t.
If there is no cash, it cannot be moved into a 401 K account
Bait and switch. They will take it all at some point, so sure.....super-size it.
Why have any limits if there is no income tax?
You can borrow it. And then take out a 401k loan to pay back the original loan. Then pay the 401K loan with money you don’t have because inflation is eating it away. Easy!
EXCELLENT comments. Thank you.
You’re welcome!
FWIW, I’m for EVERYONE keeping as much of their own money as possible.
And I don’t give a rat’s patootie how much you make.
Why tax income at all, hmmmm?
Folks should bone up on the history of how we got the income tax.
The only people who truly benefit from it, in perpetuity I might add, are Deep State.
If you do this then how would you control the middle class? How would you continue to control low income people?
The income tax fed the Federal Reserve system, which is to steal 4% from the economy per year and it does. The bankers get money for free.
Both the income tax and the Federal Reserve need shutdown.
Any time there is a conversation about taxes, I ask the person, “What is the purpose of taxes?”
If it is to fund the government, then everyone who benefits should pay into it.
But taxes have become a method of social herding; they use the tax code to drive the herd into their “accepted” behavior. The best examples of this are electric cars, capital gains tax, and mortgage interest deductions. These are not all “bad” per se, but the purpose is wrong on its face.
If the foundational concepts of the tax policy are wrong, then the entire system is wrong.
Made it as complicated as possible with three ranges of age and amounts. Typical stupid government policy wonks.
WOW! That's an annual increase of...
...wait while I check my notes...
...verifying with the IRS website...
...doing the math...
...double-checking my math...
...$500 over 2024!!!.
The age limit 60-63 years is obtuse. With full retirement age beyond 67 years, it is a devil’s game to limit the additional 401K limits to ages 60-63.
The Democrat playbook for retirement:
“rack up a LOT of debt, max out credit cards, and live like today is the last day, and gov will forgive your debt... somehow... we don’t know how, but just trust us and vote for us, we will make it happen”
“Once Trump eliminates Sosha Security taxes”
Is not going to happen. Won’t even get a GOP majority. Reality will set in, and unless they make draconian spending reductions it will only increase the debt and deficit. Besides, the reason a portion of social security benefits are taxed is based on the same reason a portion of pensions are taxed; which relates to the portion the employer contributed. Yes, you see YOU did not pay EVERYTHING for your social security benefit; your employer paid half. From that, and before the complicated formula is worked, 50% is taxable. If you had/have a pension where your employer contributed half into what became your pension, half of your pension, just like half your social security, would be taxable.
The deep state wants your savings in a fund that makes it easier for them to grab.
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