401K Game Changer

[Tekward]

It's still in the talking stage (avoiding politics) but there could be a major decrease in pre-tax contributions (from 18,000 to 2,400).

The one constant is change.....

Financial industry worried GOP tax plan will change 401(k)s | TheHill

 

[IMATERP]

It's still in the talking stage (avoiding politics) but there could be a major decrease in pre-tax contributions (from 18,000 to 2,400).

The one constant is change.....

Financial industry worried GOP tax plan will change 401(k)s | TheHill

I think it's more trouble than what it's worth ($18k to 2.4k.). The only true winners of the upcoming overhaul will be the extremely wealthy.

Most of the middle class and lower tier folks cannot afford to make contributions
So it really will be a non-issue to them.

 

[Freedom56]

It's $24,000 if you are 50 and older plus any company matching. But for early retirees this is a non-event. My days of 401k contributions ended with early retirement in 2015.

 

[Surewhitey]

Yeah, I read that yesterday. I wonder how many people this really affects. I don't know that many who can afford to even save $200 / month.

It will affect us, but there's always another avenue to go down. Just opened an HSA through employer (first year offered), so we at least will get another $6,700 in the coffers this year and in the future.

Then there's the talk of doubling the standard deduction...the gubmint giveth and taketh away...

 

[ExFlyBoy5]

Most of the middle class and lower tier folks cannot afford to make contributions
So it really will be a non-issue to them.

I am solidly middle class and didn't have issues maxing out my contributions. It's my opinion that these folks that "can't" instead "won't "; they prefer to put their money in $60,000 pickup trucks and $1,000 phones. It's all about choices.

 

[jollystomper]

Here is an article that looked at the average 401K contribution by workers: https://www.fool.com/retirement/2017/01/15/average-americans-401k-contributions-by-age-and-in.aspx

Some quotes from the article:

Vanguard's "How America Saves 2016" report finds that contribution rates to defined contribution plans, including 401(k) plans, vary widely depending on age and income, and that the average worker set aside 6.8% of their earnings in these accounts in 2015... one-third of Americans are saving less than 4% of their income in these plans...

Since the average income in America is $46,409, a significant number of workers are saving less than $1,856 annually.... However, half of baby boomers have saved less than $100,000 for retirement, including 37% who have saved less than $50,000...

 

[SonofCohoes]

What is a middle class income?

 

[W2R]

This thread is being closed because these ideas are speculation, proposed by individuals or groups with agendas, and discussion always gets political, and partisan. For that reason, tax proposals are fair topics for discussion once they are out of committee and under consideration by either of the two legislative bodies.