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.
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.
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.
[ Insert “It’s a trap!” meme ]
401(K) is not the best way to save.
You get penalties for early withdrawal, and you will get hurt at the old age.
When you reach certain age, you are forced to withdraw, even if you do not need to. The tax rate on 401(K) withdrawal is like ordinary income, so you may end up paying a lot of taxes during retirement, paying large Medicaid premiums, etc.
Some 401 (K) are OK, especially, if you get employer match, but too much is not good.
Straight investment in stocks and funds let you tax lot of your income in long term capital tax rates, which, except for one, complicated exemption, is not available on 401(K) withdrawals!
Fattening up the savings accounts so Democrats can seize them in the future under the guise of government provided retirement payments.
LOL!! What savings?
By the time your 64, you need to start rethinking 401K contributions because of the Required Minimum Distributions that will hit in your 70s. Need to probably start winding it down so you don’t get forced to take too much out, which could drive you to a higher tax bracket.