IRS 401k bombshell, now what?

[Anonymous]

Anonymous wrote:Why would someone need catch up contributions?

To catch up. I did not get my first high paying job till 45. Up till then I did just enough for match at my lower paying jobs. However, since 50 I have been doing catch up. It really helped. I am over two million in the 401ks. Mainly from doing the catch up for 13 years in a row now.

When younger my cheap company only matched 50 percent of first 6 percent or 3 percent. When I was making 30K and put in 6 percent even with match that was only $2,700 a year. I needed the catch up

[Anonymous]

Anonymous wrote:

Anonymous wrote:Just calm down everyone. This is not a big deal. The bulk of your contributions will remain pre-tax, just the catch-up portion will be after tax in ROTH. For each individual, it will be a neglectable increase in taxes, but for the country as a whole, this will results in more tax revenue coming in today (rather than down the road).

It's not just a tax concern. Today we can put in 7,500 additional and pay no tax on that today to max out. In the future, we will need to put in 12-13k to net 7,500 after taxes. So that's increasing the contribution by about 50% to have the same amount of principal earning returns. Your tax rate may vary.

it is way more than that. The super catch up for 60-63 is around $11,500 per person next year. A married couple of 60 and 62 would be able to do $23,000 in super catch up. This year is pretax and next year is post tax.