There’s talk of capping 401(k) contributions at $2,400 per year

[Peter1469]

There’s talk of capping 401(k) contributions at $2,400 per year

This is not a good idea. I wonder who is floating it?

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.

Experts say most Americans are under-prepared for retirement. This plan would make that worse.

[Kacper]

Doubt it happens for other reasons. There is almost $5T in the market in 401K's. The indices would tank if that money stopped flowing into the markets. In addition, people like me would be royally PO'd if my retirement planning got gutted so the top 1% got a tax cut.

[Common]

The house floated it and I just dont understand it. Americans do not save enough as it is and they certainly dont save enough for retirement. Somehow they think its a good idea to cap how much they can save for retirement. What the hell could be the purpose for that.

[Peter1469]

During the 2008 elections the left floated the idea of taking all 401Ks and trading the dollars for T-Bills- making them backed by bonds. At the time I said that would end the country. Investors would rebel.

[DGUtley]

I don't get the suggestion. Why? To tax more income? There's already an annual limit for HCIs. This would hurt the people that need it the most.

[Peter1469]

I don't get the suggestion. Why? To tax more income? There's already an annual limit for HCIs. This would hurt the people that need it the most.

Right, to tax another $3100 per year from all who max out their 401Ks.

And yes, that just hurts people who save for their retirements.

[Common]

I don't get the suggestion. Why? To tax more income? There's already an annual limit for HCIs. This would hurt the people that need it the most.

Exactly, just like with bush tax cuts that they touted as an across the board tax cut for everyone, that was just not true

[Kacper]

The house floated it and I just dont understand it. Americans do not save enough as it is and they certainly dont save enough for retirement. Somehow they think its a good idea to cap how much they can save for retirement. What the hell could be the purpose for that.

My guess is that they assume that those who don't save by 401K will invest directly in the market which will push more volume/trading into the day to day exchanges.

[DGUtley]

My guess is that they assume that those who don't save by 401K will invest directly in the market which will push more volume/trading into the day to day exchanges.

They have to know that's not true. If you let people take it home, they spend it generally. The 401K is a good method of tax reduction and forced savings.

[donttread]

There’s talk of capping 401(k) contributions at $2,400 per year

This is not a good idea. I wonder who is floating it?



Experts say most Americans are under-prepared for retirement. This plan would make that worse.

No doubt proposed by someone who makes millions in unearned income and only pays 20% on most of those millions.