401k savings limit to increase in 2023

[Anonymous]

Those complaining about taxes should compare what there equivalent salaries and taxes would be in Canada, Europe and Japan. In most cases high earners will realize that things are far better here for you in terms on money.

[Anonymous]

I can't believe how bitter they are that some poor people are getting a larger proportional "payback" from Social Security. The vast, vast, VAST majority of these people aren't even people who can possibly put away the 401k savings limit, so the "advantage" they have over you is purely theoretical, and I'm reasonably sure you wouldn't trade for the lifestyle of someone whose primary income in retirement is from SS. (I have an HHI of $160k and day care bills, and I'm not sure we will be able to afford to max out with these new limits, so I know people making much less would have a very hard time with it, and the statistics on US retirement savings are pretty dismal.)

If you're upset that if someone with much less than you is getting a proportional tax break you're not, I suggest rolling around in your much larger absolute quantity of money to feel better.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people cannot afford to do this

The people who cannot afford to do this don’t really need to save this much. Median HHI is around $78K and everyone knows that 20% of income needs to be set aside for retirement savings. That’s only $15,600 needed per year, so no need to save more by traditional standards.

The real concern is for those families that make more than $145K per year. The $29K allowance between 401k and IRA contributions isn’t really enough for these people. Congress should change the rules so that pre-tax contribution limits vary as a percentage of HHI so that everyone is permitted to save 20% of their income for retirement. This is especially true for high HHI families since social security replaces a lesser percentage of income as income increases. DH and I both work, but the $58K allowance between our collective retirement plans isn’t even 10% of our HHI. And we don’t even get a tax break on the IRA contributions anyway. So illogical and unfair. LMC and MC families don’t know how lucky they are!

Really? I'd rather have twice as much money even if I couldn't put away as high a proportion in taxed advantaged accounts....wouldn't you?

Yes, but nothing prevents someone from making twice as much money. It is a personal choice. Get a second job. Become a physician instead of a teacher. Become an engineer instead of an bus driver. If you don’t have the skills, get them. Reading books is free. Financial Aid is available for those in need. You get the idea.

On the other hand, when it comes to tax-advantaged savings, there are very limited personal choices. There are literally laws that prevent high income individuals from saving the same percentage of their income pre-tax as their lower income counterparts. This is on top of a progressive tax bracketing structure and on top of many tax deductions that phase out with income and on top of many tax credits that phase out with income.

A person with an HHI of $500K paying taxes on 80% of their income is still paying taxes on $400K as compared to someone with an HHI of $160K who ends up paying taxes on only $128K. The high income individual is still paying a lot more in taxes, despite the more equitable savings structure. Do we really need to keep piling on countless nonlinear penalties for earned income?!? No one is calling for anything as radical as a flat income tax here.

This is such a rude post. I’m a teacher with a Master’s degree and 2 kids. I already coach and sponsors as many after school activities as I can and still barely making ends meet. When exactly would I work a second job? Just the childcare funds alone would eat up the income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people cannot afford to do this

The people who cannot afford to do this don’t really need to save this much. Median HHI is around $78K and everyone knows that 20% of income needs to be set aside for retirement savings. That’s only $15,600 needed per year, so no need to save more by traditional standards.

The real concern is for those families that make more than $145K per year. The $29K allowance between 401k and IRA contributions isn’t really enough for these people. Congress should change the rules so that pre-tax contribution limits vary as a percentage of HHI so that everyone is permitted to save 20% of their income for retirement. This is especially true for high HHI families since social security replaces a lesser percentage of income as income increases. DH and I both work, but the $58K allowance between our collective retirement plans isn’t even 10% of our HHI. And we don’t even get a tax break on the IRA contributions anyway. So illogical and unfair. LMC and MC families don’t know how lucky they are!

Really? I'd rather have twice as much money even if I couldn't put away as high a proportion in taxed advantaged accounts....wouldn't you?

Yes, but nothing prevents someone from making twice as much money. It is a personal choice. Get a second job. Become a physician instead of a teacher. Become an engineer instead of an bus driver. If you don’t have the skills, get them. Reading books is free. Financial Aid is available for those in need. You get the idea.

On the other hand, when it comes to tax-advantaged savings, there are very limited personal choices. There are literally laws that prevent high income individuals from saving the same percentage of their income pre-tax as their lower income counterparts. This is on top of a progressive tax bracketing structure and on top of many tax deductions that phase out with income and on top of many tax credits that phase out with income.

A person with an HHI of $500K paying taxes on 80% of their income is still paying taxes on $400K as compared to someone with an HHI of $160K who ends up paying taxes on only $128K. The high income individual is still paying a lot more in taxes, despite the more equitable savings structure. Do we really need to keep piling on countless nonlinear penalties for earned income?!? No one is calling for anything as radical as a flat income tax here.

This is such a rude post. I’m a teacher with a Master’s degree and 2 kids. I already coach and sponsors as many after school activities as I can and still barely making ends meet. When exactly would I work a second job? Just the childcare funds alone would eat up the income.

Here’s a novel concept: stop trying to live a physician’s lifestyle on a teacher’s salary!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people cannot afford to do this

The people who cannot afford to do this don’t really need to save this much. Median HHI is around $78K and everyone knows that 20% of income needs to be set aside for retirement savings. That’s only $15,600 needed per year, so no need to save more by traditional standards.

The real concern is for those families that make more than $145K per year. The $29K allowance between 401k and IRA contributions isn’t really enough for these people. Congress should change the rules so that pre-tax contribution limits vary as a percentage of HHI so that everyone is permitted to save 20% of their income for retirement. This is especially true for high HHI families since social security replaces a lesser percentage of income as income increases. DH and I both work, but the $58K allowance between our collective retirement plans isn’t even 10% of our HHI. And we don’t even get a tax break on the IRA contributions anyway. So illogical and unfair. LMC and MC families don’t know how lucky they are!

With the mega Roth IRA you can put away $66,000 per person per year plus back door Roth of $6500 per person.

You can't just decide to do a mega Roth, you have to be in an industry and job where they even offer you the ability to do it.

Then do it. Change your job to one that allows this. Pull yourself by the bootstraps too.

[Anonymous]

Anonymous[b wrote:]The IRS is increasing the limits for 401k, 403b, etc up to $22,500 next year and the IRA limit is increasing from $6,000 to $6,500. Good news for those who want to save more pre-tax next year.[/b]

https://apnews.com/article/government-and-politics-business-441920f23fee68afd8a389470ab28013

hmmmm. And to think what I've lost in those accounts in the last few months . . .

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people cannot afford to do this

The people who cannot afford to do this don’t really need to save this much. Median HHI is around $78K and everyone knows that 20% of income needs to be set aside for retirement savings. That’s only $15,600 needed per year, so no need to save more by traditional standards.

The real concern is for those families that make more than $145K per year. The $29K allowance between 401k and IRA contributions isn’t really enough for these people. Congress should change the rules so that pre-tax contribution limits vary as a percentage of HHI so that everyone is permitted to save 20% of their income for retirement. This is especially true for high HHI families since social security replaces a lesser percentage of income as income increases. DH and I both work, but the $58K allowance between our collective retirement plans isn’t even 10% of our HHI. And we don’t even get a tax break on the IRA contributions anyway. So illogical and unfair. LMC and MC families don’t know how lucky they are!

You're "permitted" to save as much of your income as you want. You just don't get to deduct more than the allowance from your taxable income. If you want to save more of your $580,000 (at least, based on your 10 percent stat) household income, I'm sure you can figure out how to open a taxable investment account.

The point is those making $400K+ are already paying in the top tax bracket, loosing most itemized deductions (as they phase out and thanks to AMT). The tax rate is already ridiculously high and another loss is the inability to save as much percentage wise thru tax free investing. Majority of us are not worth $10M+. And if we are, we are paying high taxes on all earnings (ie stock options are taxed, no way around it).
SO yes, we make alot more, but we also pay significantly more in taxes. Most of us are not able to reduce our taxes---it's just not legal. So given that by Age 45 I have paid more in state taxes than 95% of people will ever pay in Federal and state taxes over their lifetime, I do think I'm entitled to comment on this. I more than pay my "fair share"; yet I don't get most tax deductions available to the majority of Americans.
That doesn't even take into account federal taxes. We pay alot already. It's not us you should be mad at for "not paying taxes". It's the ultra wealthy, and businesses that don't pay the appropriate tax rate.

Who's fault is that? Only yours. You should have been an entrepreneur or work for a successful startup in Silicon Valley. Stop being such a loser and get a second job.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people cannot afford to do this

The people who cannot afford to do this don’t really need to save this much. Median HHI is around $78K and everyone knows that 20% of income needs to be set aside for retirement savings. That’s only $15,600 needed per year, so no need to save more by traditional standards.

The real concern is for those families that make more than $145K per year. The $29K allowance between 401k and IRA contributions isn’t really enough for these people. Congress should change the rules so that pre-tax contribution limits vary as a percentage of HHI so that everyone is permitted to save 20% of their income for retirement. This is especially true for high HHI families since social security replaces a lesser percentage of income as income increases. DH and I both work, but the $58K allowance between our collective retirement plans isn’t even 10% of our HHI. And we don’t even get a tax break on the IRA contributions anyway. So illogical and unfair. LMC and MC families don’t know how lucky they are!

Really? I'd rather have twice as much money even if I couldn't put away as high a proportion in taxed advantaged accounts....wouldn't you?

Yes, but nothing prevents someone from making twice as much money. It is a personal choice. Get a second job. Become a physician instead of a teacher. Become an engineer instead of an bus driver. If you don’t have the skills, get them. Reading books is free. Financial Aid is available for those in need. You get the idea.

On the other hand, when it comes to tax-advantaged savings, there are very limited personal choices. There are literally laws that prevent high income individuals from saving the same percentage of their income pre-tax as their lower income counterparts. This is on top of a progressive tax bracketing structure and on top of many tax deductions that phase out with income and on top of many tax credits that phase out with income.

A person with an HHI of $500K paying taxes on 80% of their income is still paying taxes on $400K as compared to someone with an HHI of $160K who ends up paying taxes on only $128K. The high income individual is still paying a lot more in taxes, despite the more equitable savings structure. Do we really need to keep piling on countless nonlinear penalties for earned income?!? No one is calling for anything as radical as a flat income tax here.

This is such a rude post. I’m a teacher with a Master’s degree and 2 kids. I already coach and sponsors as many after school activities as I can and still barely making ends meet. When exactly would I work a second job? Just the childcare funds alone would eat up the income.

Here’s a novel concept: stop trying to live a physician’s lifestyle on a teacher’s salary!

I think you're in the wrong thread, this one is about the physicians whining that the teacher gets to put a higher % of her income in a 401k. Even though they both can put in the exact same dollar amount - literally, the "problem" is that they have more money than the teacher.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people cannot afford to do this

The people who cannot afford to do this don’t really need to save this much. Median HHI is around $78K and everyone knows that 20% of income needs to be set aside for retirement savings. That’s only $15,600 needed per year, so no need to save more by traditional standards.

The real concern is for those families that make more than $145K per year. The $29K allowance between 401k and IRA contributions isn’t really enough for these people. Congress should change the rules so that pre-tax contribution limits vary as a percentage of HHI so that everyone is permitted to save 20% of their income for retirement. This is especially true for high HHI families since social security replaces a lesser percentage of income as income increases. DH and I both work, but the $58K allowance between our collective retirement plans isn’t even 10% of our HHI. And we don’t even get a tax break on the IRA contributions anyway. So illogical and unfair. LMC and MC families don’t know how lucky they are!

Really? I'd rather have twice as much money even if I couldn't put away as high a proportion in taxed advantaged accounts....wouldn't you?

Yes, but nothing prevents someone from making twice as much money. It is a personal choice. Get a second job. Become a physician instead of a teacher. Become an engineer instead of an bus driver. If you don’t have the skills, get them. Reading books is free. Financial Aid is available for those in need. You get the idea.

On the other hand, when it comes to tax-advantaged savings, there are very limited personal choices. There are literally laws that prevent high income individuals from saving the same percentage of their income pre-tax as their lower income counterparts. This is on top of a progressive tax bracketing structure and on top of many tax deductions that phase out with income and on top of many tax credits that phase out with income.

A person with an HHI of $500K paying taxes on 80% of their income is still paying taxes on $400K as compared to someone with an HHI of $160K who ends up paying taxes on only $128K. The high income individual is still paying a lot more in taxes, despite the more equitable savings structure. Do we really need to keep piling on countless nonlinear penalties for earned income?!? No one is calling for anything as radical as a flat income tax here.

This is such a rude post. I’m a teacher with a Master’s degree and 2 kids. I already coach and sponsors as many after school activities as I can and still barely making ends meet. When exactly would I work a second job? Just the childcare funds alone would eat up the income.

Here’s a novel concept: stop trying to live a physician’s lifestyle on a teacher’s salary!

I think you're in the wrong thread, this one is about the physicians whining that the teacher gets to put a higher % of her income in a 401k. Even though they both can put in the exact same dollar amount - literally, the "problem" is that they have more money than the teacher.

No, this is typical cherry picking of rules for taxation. When it comes to taking taxes, it is done as a percentage of income (and progressively at that)…but, when it comes to proving a tax-sheltered deduction, it is implemented as a fixed dollar amount. This is illogical, as it nonlinearly benefits those in lower income brackets, thereby incentivizing people to remain in low income tax brackets. Is this all some sort of extravagant ploy to reward low-paying careers that provide inherent public benefit? If so, maybe this is somewhat sensible after all. If it is just a welfare system, however, it really needs to be eliminated and overhauled with a better plan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people cannot afford to do this

The people who cannot afford to do this don’t really need to save this much. Median HHI is around $78K and everyone knows that 20% of income needs to be set aside for retirement savings. That’s only $15,600 needed per year, so no need to save more by traditional standards.

The real concern is for those families that make more than $145K per year. The $29K allowance between 401k and IRA contributions isn’t really enough for these people. Congress should change the rules so that pre-tax contribution limits vary as a percentage of HHI so that everyone is permitted to save 20% of their income for retirement. This is especially true for high HHI families since social security replaces a lesser percentage of income as income increases. DH and I both work, but the $58K allowance between our collective retirement plans isn’t even 10% of our HHI. And we don’t even get a tax break on the IRA contributions anyway. So illogical and unfair. LMC and MC families don’t know how lucky they are!

Really? I'd rather have twice as much money even if I couldn't put away as high a proportion in taxed advantaged accounts....wouldn't you?

Yes, but nothing prevents someone from making twice as much money. It is a personal choice. Get a second job. Become a physician instead of a teacher. Become an engineer instead of an bus driver. If you don’t have the skills, get them. Reading books is free. Financial Aid is available for those in need. You get the idea.

On the other hand, when it comes to tax-advantaged savings, there are very limited personal choices. There are literally laws that prevent high income individuals from saving the same percentage of their income pre-tax as their lower income counterparts. This is on top of a progressive tax bracketing structure and on top of many tax deductions that phase out with income and on top of many tax credits that phase out with income.

A person with an HHI of $500K paying taxes on 80% of their income is still paying taxes on $400K as compared to someone with an HHI of $160K who ends up paying taxes on only $128K. The high income individual is still paying a lot more in taxes, despite the more equitable savings structure. Do we really need to keep piling on countless nonlinear penalties for earned income?!? No one is calling for anything as radical as a flat income tax here.

This is such a rude post. I’m a teacher with a Master’s degree and 2 kids. I already coach and sponsors as many after school activities as I can and still barely making ends meet. When exactly would I work a second job? Just the childcare funds alone would eat up the income.

Here’s a novel concept: stop trying to live a physician’s lifestyle on a teacher’s salary!

I think you're in the wrong thread, this one is about the physicians whining that the teacher gets to put a higher % of her income in a 401k. Even though they both can put in the exact same dollar amount - literally, the "problem" is that they have more money than the teacher.

No, this is typical cherry picking of rules for taxation. When it comes to taking taxes, it is done as a percentage of income (and progressively at that)…but, when it comes to proving a tax-sheltered deduction, it is implemented as a fixed dollar amount. This is illogical, as it nonlinearly benefits those in lower income brackets, thereby incentivizing people to remain in low income tax brackets. Is this all some sort of extravagant ploy to reward low-paying careers that provide inherent public benefit? If so, maybe this is somewhat sensible after all. If it is just a welfare system, however, it really needs to be eliminated and overhauled with a better plan.

NP here:
No one likes you. Read the room.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people cannot afford to do this

The people who cannot afford to do this don’t really need to save this much. Median HHI is around $78K and everyone knows that 20% of income needs to be set aside for retirement savings. That’s only $15,600 needed per year, so no need to save more by traditional standards.

The real concern is for those families that make more than $145K per year. The $29K allowance between 401k and IRA contributions isn’t really enough for these people. Congress should change the rules so that pre-tax contribution limits vary as a percentage of HHI so that everyone is permitted to save 20% of their income for retirement. This is especially true for high HHI families since social security replaces a lesser percentage of income as income increases. DH and I both work, but the $58K allowance between our collective retirement plans isn’t even 10% of our HHI. And we don’t even get a tax break on the IRA contributions anyway. So illogical and unfair. LMC and MC families don’t know how lucky they are!

Really? I'd rather have twice as much money even if I couldn't put away as high a proportion in taxed advantaged accounts....wouldn't you?

Yes, but nothing prevents someone from making twice as much money. It is a personal choice. Get a second job. Become a physician instead of a teacher. Become an engineer instead of an bus driver. If you don’t have the skills, get them. Reading books is free. Financial Aid is available for those in need. You get the idea.

On the other hand, when it comes to tax-advantaged savings, there are very limited personal choices. There are literally laws that prevent high income individuals from saving the same percentage of their income pre-tax as their lower income counterparts. This is on top of a progressive tax bracketing structure and on top of many tax deductions that phase out with income and on top of many tax credits that phase out with income.

A person with an HHI of $500K paying taxes on 80% of their income is still paying taxes on $400K as compared to someone with an HHI of $160K who ends up paying taxes on only $128K. The high income individual is still paying a lot more in taxes, despite the more equitable savings structure. Do we really need to keep piling on countless nonlinear penalties for earned income?!? No one is calling for anything as radical as a flat income tax here.

This is such a rude post. I’m a teacher with a Master’s degree and 2 kids. I already coach and sponsors as many after school activities as I can and still barely making ends meet. When exactly would I work a second job? Just the childcare funds alone would eat up the income.

Here’s a novel concept: stop trying to live a physician’s lifestyle on a teacher’s salary!

I think you're in the wrong thread, this one is about the physicians whining that the teacher gets to put a higher % of her income in a 401k. Even though they both can put in the exact same dollar amount - literally, the "problem" is that they have more money than the teacher.

No, this is typical cherry picking of rules for taxation. When it comes to taking taxes, it is done as a percentage of income (and progressively at that)…but, when it comes to proving a tax-sheltered deduction, it is implemented as a fixed dollar amount. This is illogical, as it nonlinearly benefits those in lower income brackets, thereby incentivizing people to remain in low income tax brackets. Is this all some sort of extravagant ploy to reward low-paying careers that provide inherent public benefit? If so, maybe this is somewhat sensible after all. If it is just a welfare system, however, it really needs to be eliminated and overhauled with a better plan.

Nonlinearly benefits, eh? You are trying too hard to come across as smart; it is not working.

[Anonymous]

The tax deduction for retirement accounts is a policy tool to encourage people to save money for retirement to ensure a relatively comfortable retirement (or anything in addition to social security). I don’t see any benefit in making sure that high income earners can get as many tax deductions as they want.

[Anonymous]

Anonymous wrote:The tax deduction for retirement accounts is a policy tool to encourage people to save money for retirement to ensure a relatively comfortable retirement (or anything in addition to social security). I don’t see any benefit in making sure that high income earners can get as many tax deductions as they want.

IMO the gestalt is that our policies do not adequate go after the superrich, corporations, carried interest loophole, etc. so that starts to become obvious and UMC W2 earnings (who often have tons of student debt etc. compared to born rich wealth) realize they are extra targeted by the tax system and also are the category most likely to see benefits they might rely on cut by income tiering (EV tax credit as one small example but illustrative of how laws are structured). So then that makes them start to vote GOP or against social net policies for those in more need, even if they initially started out in favor of those programs. If we raised obligations on the superrich the whole scheme would feel fairer. And yes, high income earners get a tiny violin but as a practical matter that is what I would change.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people cannot afford to do this

The people who cannot afford to do this don’t really need to save this much. Median HHI is around $78K and everyone knows that 20% of income needs to be set aside for retirement savings. That’s only $15,600 needed per year, so no need to save more by traditional standards.

The real concern is for those families that make more than $145K per year. The $29K allowance between 401k and IRA contributions isn’t really enough for these people. Congress should change the rules so that pre-tax contribution limits vary as a percentage of HHI so that everyone is permitted to save 20% of their income for retirement. This is especially true for high HHI families since social security replaces a lesser percentage of income as income increases. DH and I both work, but the $58K allowance between our collective retirement plans isn’t even 10% of our HHI. And we don’t even get a tax break on the IRA contributions anyway. So illogical and unfair. LMC and MC families don’t know how lucky they are!

Really? I'd rather have twice as much money even if I couldn't put away as high a proportion in taxed advantaged accounts....wouldn't you?

Yes, but nothing prevents someone from making twice as much money. It is a personal choice. Get a second job. Become a physician instead of a teacher. Become an engineer instead of an bus driver. If you don’t have the skills, get them. Reading books is free. Financial Aid is available for those in need. You get the idea.

On the other hand, when it comes to tax-advantaged savings, there are very limited personal choices. There are literally laws that prevent high income individuals from saving the same percentage of their income pre-tax as their lower income counterparts. This is on top of a progressive tax bracketing structure and on top of many tax deductions that phase out with income and on top of many tax credits that phase out with income.

A person with an HHI of $500K paying taxes on 80% of their income is still paying taxes on $400K as compared to someone with an HHI of $160K who ends up paying taxes on only $128K. The high income individual is still paying a lot more in taxes, despite the more equitable savings structure. Do we really need to keep piling on countless nonlinear penalties for earned income?!? No one is calling for anything as radical as a flat income tax here.

Nothing prevents you from taking one of those low paid jobs and paying less % in taxes. Quit whining.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The tax deduction for retirement accounts is a policy tool to encourage people to save money for retirement to ensure a relatively comfortable retirement (or anything in addition to social security). I don’t see any benefit in making sure that high income earners can get as many tax deductions as they want.

IMO the gestalt is that our policies do not adequate go after the superrich, corporations, carried interest loophole, etc. so that starts to become obvious and UMC W2 earnings (who often have tons of student debt etc. compared to born rich wealth) realize they are extra targeted by the tax system and also are the category most likely to see benefits they might rely on cut by income tiering (EV tax credit as one small example but illustrative of how laws are structured). So then that makes them start to vote GOP or against social net policies for those in more need, even if they initially started out in favor of those programs. If we raised obligations on the superrich the whole scheme would feel fairer. And yes, high income earners get a tiny violin but as a practical matter that is what I would change.

Totally agree.