Reply to 401k savings limit to increase in 2023

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Reply to "401k savings limit to increase in 2023"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Most people cannot afford to do this[/quote]

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![/quote]

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. [/quote]

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