Reply to IRS 401k bombshell, now what?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]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).[/quote]

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.[/quote]

If this is your level of understanding, you really ought to be paying someone else to make your financial decisions for you. The taxes are a wash if you are at the same tax rate, so the crux of the question is whether you expect to be paying the same tax rate when you withdraw. Many can predict whether they will be in a lower tax bracket in retirement but with speculation that eventually tax rates may jump due to the national debt, it’s anyone’s guess whether the lower tax bracket will have a rate that’s lower than you pay now. [/quote]

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