Why Is There An Annual Limit?

[Tommy_Dolitte]

...to 401-K and Roth IRA accounts....

:-/

[unclemick]

The U.S. Congress - they pass laws.

[haha]

Tell me why,
The stars do shine
Tell me why
The Ivy twines....

Because God made me
That's why I love you.

[unclemick]

Heh heh

Pay me now(Roth) or pay me later(401k) - we WILL get our taxes - your friends Da Govt.

Because the money you save in taxes = the money the government loses.

The government wants you to wet your beak, but is not looking to put itself out of business.

I would put every dollar of savings in my ROTH IRA if there were no limit and so would every other smart investor.

[Michael]

The politicians don't want you to save too much money, since you might retire early and stop paying taxes.

[Tommy_Dolitte]

Michael --

That's was I thinking as well. It seems as if the gov has done a balance and figured out what the amount should be to keep the average person working for at least 20 years.

In an indirect way...they've told on themselves----that government is an oppressive business.

How the hell are you "helping" me by putting boundaries?

I'm sure there's a point of view that would say, the magnitude of your returns woruld suffer if "x" number of people were able to retire from adding value to the economy *laughs*.

My argument would be...review statistics on howmuch people save today, avg. age of retirees, and the avg amount of consumer debt? Yeah right....

TD

"Stating facts is not thinking...it's recycling." -- TD

[brewer12345]

Natcherly, one is not restricted from only funding tax-advantaged plans. After-tax savings are very much a good thing, and I'd have some even if there were no limit on deductible plans.

I think I knbow this answer (hell I think I know all answers ...................but,
is there a way to set aside a DEDUCTIBLE" retirement
plan inside my small holding company (Sole owner)
even though I pay myself no salary? I need tax
deductions but want to do it without setting up a payroll
to avoid the related taxes and paperwork. My CPA and I don't see how it can be done.

John Galt

[Jarhead*]

Quote:

I think I knbow this answer (hell I think I know all answers ...................but, is there a way to set aside a DEDUCTIBLE" retirement plan inside my small holding company (Sole owner) even though I pay myself no salary? * I need tax deductions but want to do it without setting up a payroll to avoid the related taxes and paperwork. *My CPA and I don't see how it can be done. John Galt

John Galt:
It can't be done.
Why would you need tax deductions anyway. I remember in a post a short time ago that you stated you were paying no income taxes. (With what you reported in prev. posts, re: net worth, etc., I sure can't imagine how this could be a problem.
I make it a habit to read all new posts everyday, as from time to time I find someone has an idea that can be helpful, and for an old duffer, I have a pretty fair memory.(Sorry John)

[brewer12345]

Quote:

I think I knbow this answer (hell I think I know all answers ...................but, is there a way to set aside a DEDUCTIBLE" retirement plan inside my small holding company (Sole owner) even though I pay myself no salary? * I need tax deductions but want to do it without setting up a payroll to avoid the related taxes and paperwork. *My CPA and I don't see how it can be done. John Galt

No way I can think of in a holdco, but if you can find a way to set up a sole proprietorship, solo 401k plans look pretty simple and pretty sweet.

Quote:

I think I knbow this answer (hell I think I know all answers ...................but, is there a way to set aside a DEDUCTIBLE" retirement plan inside my small holding company (Sole owner) even though I pay myself no salary? * I need tax deductions but want to do it without setting up a payroll to avoid the related taxes and paperwork. *My CPA and I don't see how it can be done. John Galt

I'm a CPA too. I'm a bit confused how you can have a business, but not have earned income, but I don't know the nature of your company nor your personal tax situation. How about one of these two options:

If you are corporation, pay your wife as a subcontractor to your business. She can have her own "billing and collection service" or some other service she can provide your corporation that doesn't fall under the 20 point employee test. The payments are deductible by your corp and taxable to her. She can set up a SEP-IRA or individual 401(k) (with you as beneficiary, of course).

OR, you can dissolve the corp and be a sole proprietor (Schedule C) whereby you can set up the same.

Somehow you do need to generate earned income for a qualified plan.