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Mon Jan 25, 2021, 03:29 PM

President Biden's Proposed Changes to 401(k) Plans

I have a few comments and concerns about this.

https://money.usnews.com/money/retirement/401ks/articles/president-bidens-proposed-changes-to-401-k-plans

Did Biden campaign on this idea? This came as a surprise. I believe it will be more or less a wash for me personally.

So if you are in the 32% tax bracket or above ($164,901 in income for an individual), it can increase your taxes. I'm a bit concerned that the Republicans could construe this as a broken campaign promise ( "Nobody making under 400,000 bucks would have their taxes raised, period, bingo." ) I guess this then becomes a debate over semantics. Really it is restricting a tax haven a bit. Is restricting a tax haven considered raising taxes? Hmm.

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Reply President Biden's Proposed Changes to 401(k) Plans (Original post)
Shermann Jan 2021 OP
KayF Jan 2021 #1
Shermann Jan 2021 #2

Response to Shermann (Original post)

Mon Jan 25, 2021, 03:37 PM

1. the answer is yes

he did campaign on this, and then he won the election. The people have spoken.


https://www.morningstar.com/articles/1002662/bidens-401k-plan-is-vague-but-worth-paying-attention-to

Biden’s plan has few details, but the most important one is clear: He would “equalize the benefit across the income scale so working families also receive a substantial tax benefit when they put money away for retirement.” This would probably lead to about a 26% credit on every dollar any worker saved for retirement. (That estimate assumes Biden’s plan would not change the total amount of the tax incentive to save in a retirement plan, just the way the tax benefit is distributed.)

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Response to KayF (Reply #1)

Mon Jan 25, 2021, 03:46 PM

2. OK not a total surprise then

I'm still breaking down the numbers but so far support the proposal. It incentivizes lower income groups to save more for retirement and provides a partial contribution match.

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