That would be so fucked up. Americans suck at saving for retirement already. Taking away the tax incentives to do so would only hurt that. Plus, 401ks are literally designed for the working class. The ultra wealthy all have trusts to shield them from tax obligations. This tax reform will be even more regressive than the previous system by the looks of it. [Reply]
Originally Posted by lewdog:
That's an absolutely shitty idea if I've ever heard one. Especially cutting the allowed maximum to next to nothing.
I do doubt the lobbyists for investment firms allow this to happen though. It would not benefit them in the slightest.
I knew it was a possibility. I can't imagine they'd really make the limit 2400. If they made it 10k and you had to contribute the last 8.5k to a ROTH 401k that wouldn't affect a lot of ppl and would bring in some extra money now.
I know the Tea Party has been against it as a financial trick and not really fixing the spending/debt issue. It's just pulling future revenue forward [Reply]
Originally Posted by ChiliConCarnage:
I knew it was a possibility. I can't imagine they'd really make the limit 2400. If they made it 10k and you had to contribute the last 8.5k to a ROTH 401k that wouldn't affect a lot of ppl and would bring in some extra money now.
I know the Tea Party has been against it as a financial trick and not really fixing the spending/debt issue. It's just pulling future revenue forward
I think it simply redistributes where my money goes and does little for the middle class as far as savings goes.
So I don't get a tax break if they limit my 401k that much. Fine, my federal taxes end up lower with this plan and my take home pay is more. However, I have to shuttle more of my take home pay into after tax investment accounts. However, the current max for a Roth IRA is $5,500 and if they cap the 401k at $2,400, my current yearly investment amount will be tremendously limited compared to where it is now ($7,900 vs $24,000). So I end up putting even more after tax money into a brokerage account which is taxed even further than either a ROTH or 401k.
I really don't understand what they hell is going on with the idea of pre-taxing 401K investments. Sounds like one of the dumbest ideas I have ever heard and would be a big disincentive to invest.
I want to see that it actually says as I keep hearing different stories on what it really is going to be. [Reply]
Originally Posted by lewdog:
I think it simply redistributes where my money goes and does little for the middle class as far as savings goes.
However, the current max for a Roth IRA is $5,500.
You'd get the same tax break as your ROTH IRA. The government limits your pre-tax contributions to 0 for your IRA. The question is should the gov limit your pre-tax contributions to a (traditional) 401k. This would force you to contribute to your ROTH 401k. You'd pay (more) taxes now instead of later. Its not a lowering of the total 401k max contribution. Just when you pay [Reply]
Originally Posted by ChiliConCarnage:
You'd get the same tax break as your ROTH IRA. The government limits your pre-tax contributions to 0 for your IRA. The question is should the gov limit your pre-tax contributions to a (traditional) 401k. This would force you to contribute to your ROTH 401k. You'd pay (more) taxes now instead of later. Its not a lowering of the total 401k max contribution. Just when you pay
So what's the max contribution for a Roth 401k?
And my employer doesn't have a Roth 401k option, so it would definitely fuck me.
I contribute to my own ROTH IRA outside of my employer. [Reply]
Originally Posted by lewdog:
So what's the max contribution for a Roth 401k?
And my employer doesn't have a Roth 401k option, so it would definitely fuck me.
I contribute to my own ROTH IRA outside of my employer.
The max contribution to a 401k is 18k/24k this year. It doesnt matter if you do it all pre tax or post tax or some mix currently. The ROTH option was nowhere when I first started working but it seems available more frequently now. It surely would be more so if they limited pre-tax contributions so low.
I still find that 2400 number laughable. That's vote yourself out of office territory.
Edit:. One note, even if you do 100% ROTH contributions in a year any company match is treated as traditional. [Reply]
Originally Posted by eDave:
Max out your 401K investments while you can:
How the GOP Tax Bill Could Squeeze Your 401(k)
Lobbyists and others in the retirement and financial services industries who have spoken to congressional staff and committee members say lawmakers are looking at proposals that would allow 401(k) participants to contribute significantly less than what is currently allowed in a traditional tax-deferred 401(k). An often mentioned amount is $2,400 a year. It isn't clear whether that would only apply to 401(k)s or IRAs or both.
I guess this would increase tax revenue in the near term.
The big gamble for most people when it comes to ira's is whether they will actually have an advantage if their contributions are pre or post tax. It depends on so many variables between their personal income level as they enter retirement (which can be strategized) and what tax law will look like when they finally do retire. There is no way to predict legislative risk for someone like me, with an RMD horizon 40 years away.
But reducing the amount of tax shelter available between either of these is criminal for the middle class. people who are conscious enough to be investing at all will be forced to do so in a taxable account outside of a 401k (probably self directing), and incur significant capital gains repercussions in addition to all their investments being post tax. A Roth with no tax benefit.
Most people will not notice anything besides an increase in their take home pay, and will not invest the difference. Which will significantly harm their retirement picture. [Reply]
Originally Posted by Cornstock:
I guess this would increase tax revenue in the near term.
The big gamble for most people when it comes to ira's is whether they will actually have an advantage if their contributions are pre or post tax. It depends on so many variables between their personal income level as they enter retirement (which can be strategized) and what tax law will look like when they finally do retire. There is no way to predict legislative risk for someone like me, with an RMD horizon 40 years away.
But reducing the amount of tax shelter available between either of these is criminal for the middle class. people who are conscious enough to be investing at all will be forced to do so in a taxable account outside of a 401k (probably self directing), and incur significant capital gains repercussions in addition to all their investments being post tax. A Roth with no tax benefit.
Most people will not notice anything besides an increase in their take home pay, and will not invest the difference. Which will significantly harm their retirement picture.
Looks like Trump took the correct stance on this. Good.
Originally Posted by :
WASHINGTON — President Trump said early on Monday that his proposed tax plan would not prompt any changes to Americans’ tax-deferred retirement plans, pushing back against reports that the Republicans are weighing a proposal that would significantly reduce the income workers can save in these popular programs.
Originally Posted by lewdog:
Let's talk about Alibaba.
Invest now as if it's the next Amazon? Or are we too late?
I am not a fan of the company. They have had numerous issues with counterfeit products and they have significant competition. That said, the stock is clearly performing well. [Reply]
Originally Posted by Nightfyre:
I am not a fan of the company. They have had numerous issues with counterfeit products and they have significant competition. That said, the stock is clearly performing well.
I realize that things are changing in China, but any Chinese company is still one corrupt official away from being nationalized. I stay away from stocks in authoritarian countries. [Reply]
Originally Posted by lewdog:
Let's talk about Alibaba.
Invest now as if it's the next Amazon? Or are we too late?
Originally Posted by Nightfyre:
I am not a fan of the company. They have had numerous issues with counterfeit products and they have significant competition. That said, the stock is clearly performing well.
Originally Posted by Rain Man:
I realize that things are changing in China, but any Chinese company is still one corrupt official away from being nationalized. I stay away from stocks in authoritarian countries.
1. BABA has cracked down massively on counterfeits. They allowed them in the beginning while they tried to grow but since they have exploded and are now public, they have come down hard.
2. BABA is MASSIVELY diversified in many other companies and is like a public VC firm. They have put chips on the table across many industries and companies.
3. While China's Communist Party can be a fickle bitch, they also are proud of their successful Chinese companies and also have investments in most of them!
I would invest Lewdog. Maybe even some long term options so your risk dollars are minimal.
There are long term BABA options that don't expire until Jan 2019, June 2019 or Jan 2020. [Reply]