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401(k) contribution limit will rise to $18,500 ($24,500) next year


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17 replies to this topic

#1 hegemony

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Posted 20 October 2017 - 08:21 PM

assuming the max is not reduced to $2400 as some anti-consumer, anti-middle class nutbars want

 

http://money.cnn.com....html?iid=SF_LN





#2 Burgerwars

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Posted 21 October 2017 - 03:34 PM

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Edited by Burgerwars, 21 October 2017 - 03:35 PM.


#3 hegemony

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Posted 21 October 2017 - 06:37 PM

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Roth IRA and traditional IRAs have such a low cap as to be meaningless.

 

a lot of people who could afford to max pretax 401k don't because they confuse wants with needs.



#4 cv91915

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Posted 22 October 2017 - 08:02 AM

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Roth IRA and traditional IRAs have such a low cap as to be meaningless.

 

a lot of people who could afford to max pretax 401k don't because they confuse wants with needs.

 

 

https://creditboards...90711&p=5682249



#5 credit_help

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Posted 22 October 2017 - 08:27 AM

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Roth IRA and traditional IRAs have such a low cap as to be meaningless.
 
a lot of people who could afford to max pretax 401k don't because they confuse wants with needs.
Also does anyone negotiate with employer to contribute maximum ($54,000 overall for 2017) if they could?

Edited by credit_help, 22 October 2017 - 08:32 AM.


#6 tobettercredit

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Posted 22 October 2017 - 03:06 PM

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Roth IRA and traditional IRAs have such a low cap as to be meaningless.

 

a lot of people who could afford to max pretax 401k don't because they confuse wants with needs.

 

Another reason, and I've been guilty of that, is that people's normal tendency is to try to hold on to as much or as little cash now than invest it for some remote and unknown future. Part of this problem is also just plain old ignorance about money.



#7 Cactus Flower

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Posted 28 October 2017 - 11:55 AM

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

 

Its pretty near impossible even if you have a job that pays 3 or 4 x or more than a burger flipper.  Take most people on a single income.  Even with that said, I do 9% - the company does another 3% .  I try to raise the %age now about twice a yr, but it just depends on other factors.. pay raises, cost of medical insurance premiums. Part of my 'retirement plan' also includes having no mortgage.

You are right that I will choose wants over needs at times (I believe most people do). This isn't a perfect world.



#8 Quit Screwing Me

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Posted 28 October 2017 - 12:24 PM

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

 

Its pretty near impossible even if you have a job that pays 3 or 4 x or more than a burger flipper.  Take most people on a single income.  Even with that said, I do 9% - the company does another 3% .  I try to raise the %age now about twice a yr, but it just depends on other factors.. pay raises, cost of medical insurance premiums. Part of my 'retirement plan' also includes having no mortgage.

You are right that I will choose wants over needs at times (I believe most people do). This isn't a perfect world.

 

Yep.  I'm currently at 11% plus 4% from the company.  But job changes, particularly when vesting is an issue can affect things greatly.  In a down economy when the company match gets cut, etc....   I plan on raising my contribution 1% with each raise (which isn't guaranteed) and 1% automatically each year regardless.  But it may cause a struggle at some point.   It's kind of a crap shoot.



#9 IndyPoolPlayer

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Posted 28 October 2017 - 12:26 PM

cost of medical insurance premiums.


And there it is. The big reason why people can't save or invest more. The Board's ToS prohibits any further discussion on this topic so I will leave this here.



#10 Cactus Flower

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Posted 29 October 2017 - 11:14 AM

 

cost of medical insurance premiums.


And there it is. The big reason why people can't save or invest more. The Board's ToS prohibits any further discussion on this topic so I will leave this here.

 

oh.. didn't know this was a taboo topic  :-(   everyone has line items on their paycheck which reduce it and there is just one of them.  I wasn't leading this in a political direction.



#11 Cactus Flower

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Posted 29 October 2017 - 11:21 AM

 

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

 

Its pretty near impossible even if you have a job that pays 3 or 4 x or more than a burger flipper.  Take most people on a single income.  Even with that said, I do 9% - the company does another 3% .  I try to raise the %age now about twice a yr, but it just depends on other factors.. pay raises, cost of medical insurance premiums. Part of my 'retirement plan' also includes having no mortgage.

You are right that I will choose wants over needs at times (I believe most people do). This isn't a perfect world.

 

Yep.  I'm currently at 11% plus 4% from the company.  But job changes, particularly when vesting is an issue can affect things greatly.  In a down economy when the company match gets cut, etc....   I plan on raising my contribution 1% with each raise (which isn't guaranteed) and 1% automatically each year regardless.  But it may cause a struggle at some point.   It's kind of a crap shoot.

 

really.. right now,  my priority is adding extra to my house payment to pay it off in 10-15 years or so. To me, having no house payment would be huge ... yes there is always property taxes and insurance etc. but right now, those 2 total $200/month .  I am not really sure what the difference is monetarily between saving mortgage interest and what that same money would/could earn in my 401k.  I also factor in if the house is paid off, I would not need as much money taken out of my 401k (eventually IRA) in retirement (to live off of) and that would save me income tax.  I would love to save more, but not at the expense of my sanity, I do like to have fun now & again.



#12 DollarDog

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Posted 29 October 2017 - 03:28 PM

 

 

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

 

Its pretty near impossible even if you have a job that pays 3 or 4 x or more than a burger flipper.  Take most people on a single income.  Even with that said, I do 9% - the company does another 3% .  I try to raise the %age now about twice a yr, but it just depends on other factors.. pay raises, cost of medical insurance premiums. Part of my 'retirement plan' also includes having no mortgage.

You are right that I will choose wants over needs at times (I believe most people do). This isn't a perfect world.

 

Yep.  I'm currently at 11% plus 4% from the company.  But job changes, particularly when vesting is an issue can affect things greatly.  In a down economy when the company match gets cut, etc....   I plan on raising my contribution 1% with each raise (which isn't guaranteed) and 1% automatically each year regardless.  But it may cause a struggle at some point.   It's kind of a crap shoot.

 

really.. right now,  my priority is adding extra to my house payment to pay it off in 10-15 years or so. To me, having no house payment would be huge ... yes there is always property taxes and insurance etc. but right now, those 2 total $200/month .  I am not really sure what the difference is monetarily between saving mortgage interest and what that same money would/could earn in my 401k.  I also factor in if the house is paid off, I would not need as much money taken out of my 401k (eventually IRA) in retirement (to live off of) and that would save me income tax.  I would love to save more, but not at the expense of my sanity, I do like to have fun now & again.

 

You need money for things like taxes, utilities, clothing, food, travel, services, etc.  If you own your house free and clear and have a no money in the bank or in investments, what's your plan to cover those expenses?  Cash out refi?  Then you're back to having a mortgage payment.



#13 swimmingwithsharks

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Posted 11 November 2017 - 08:24 PM

I agree there is unmeasurable psychological value in owning the home free and clear when the mortgage is paid off. The downside is that you've lost the time of compounding that contributions to your 401k would have had. It's a very personal decision. But it's also difficult to be cash-poor and asset-rich in retirement.

When you have a paid-off mortgage, there's always the possibility of a reverse mortgage in retirement, but I think those are only advantageous in a high-interest rate environment.

#14 hegemony

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Posted 11 November 2017 - 09:40 PM

 

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Roth IRA and traditional IRAs have such a low cap as to be meaningless.
 
a lot of people who could afford to max pretax 401k don't because they confuse wants with needs.
Also does anyone negotiate with employer to contribute maximum ($54,000 overall for 2017) if they could?

 

 

between my pretax and my employer contribution my non_IRA retirement accounts are funded at over 54k.



#15 credit_help

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Posted 11 November 2017 - 09:50 PM

 

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Roth IRA and traditional IRAs have such a low cap as to be meaningless.
 
a lot of people who could afford to max pretax 401k don't because they confuse wants with needs.
Also does anyone negotiate with employer to contribute maximum ($54,000 overall for 2017) if they could?
 
 
between my pretax and my employer contribution my non_IRA retirement accounts are funded at over 54k.
Thanks Hegemony. Since employee max contribution is $18K, your employer is contributing $36K which probably is a lot more than typical 4-8% match.

Edited by credit_help, 11 November 2017 - 09:51 PM.


#16 hegemony

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Posted 11 November 2017 - 11:14 PM

 

 

 

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Roth IRA and traditional IRAs have such a low cap as to be meaningless.
 
a lot of people who could afford to max pretax 401k don't because they confuse wants with needs.
Also does anyone negotiate with employer to contribute maximum ($54,000 overall for 2017) if they could?
 
 
between my pretax and my employer contribution my non_IRA retirement accounts are funded at over 54k.
Thanks Hegemony. Since employee max contribution is $18K, your employer is contributing $36K which probably is a lot more than typical 4-8% match.

 

I wish it was my employer putting in that much; but instead it is me who is contributing the 36k in two deferred comp options that I can max. I then I have a "forced" retirement program where I put in 14.5% and that is matched 14,5%.



#17 credit_help

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Posted 11 November 2017 - 11:17 PM

 

 

 

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Roth IRA and traditional IRAs have such a low cap as to be meaningless.
 
a lot of people who could afford to max pretax 401k don't because they confuse wants with needs.
Also does anyone negotiate with employer to contribute maximum ($54,000 overall for 2017) if they could?
 
 
between my pretax and my employer contribution my non_IRA retirement accounts are funded at over 54k.
Thanks Hegemony. Since employee max contribution is $18K, your employer is contributing $36K which probably is a lot more than typical 4-8% match.
 
I wish it was my employer putting in that much; but instead it is me who is contributing the 36k in two deferred comp options that I can max. I then I have a "forced" retirement program where I put in 14.5% and that is matched 14,5%.
14.5% is a ver good employer match. Are the two deferred comp options at one job?

#18 hegemony

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Posted 12 November 2017 - 01:34 PM

 

 

 

 

 

 

I've read only 12% contribute the maximum, and only 16% of eligible participants do catch up contributions. It's a matter of what one can afford. $18,500 is impossible for the vast majority, especially if they're flipping burgers.

The $2,400 limit is all of this politician "tax reform" talk, and it probably wouldn't apply to Roth accounts. Disable the way to defer paying taxes so the 1% and cash flush corporations can pay less taxes.

Roth IRA and traditional IRAs have such a low cap as to be meaningless.
 
a lot of people who could afford to max pretax 401k don't because they confuse wants with needs.
Also does anyone negotiate with employer to contribute maximum ($54,000 overall for 2017) if they could?
 
 
between my pretax and my employer contribution my non_IRA retirement accounts are funded at over 54k.
Thanks Hegemony. Since employee max contribution is $18K, your employer is contributing $36K which probably is a lot more than typical 4-8% match.
 
I wish it was my employer putting in that much; but instead it is me who is contributing the 36k in two deferred comp options that I can max. I then I have a "forced" retirement program where I put in 14.5% and that is matched 14,5%.
14.5% is a ver good employer match. Are the two deferred comp options at one job?

 

the 14.5% sounds good until you learn I'm opted out of social security -- so no defined benefit plan in retirement...

 

403b & 457 deferred comps via same job.






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