IRA and 401K limits increase for 2019

Discussion in 'Finance, Investments, and Careers' started by Zeno, Nov 3, 2018.

  1. AZCB34

    AZCB34 Registered User

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    My boys are 19 and 16 and they both contribute to an IRA. My oldest Also is putting enough money into a 401k to get the employer match. The job he has while going through school offers it. I "force" them to do this for the exact reason you mentioned...i wish someone had been really pushed me to save. I see the missed opportunity.
     
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  2. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    Uh you know you can save more. Just not in a tax favored vehicle. No one is stopping you from actually saving more. Also, if you’ve got an HSA, max that out and keep all those savings for medical in retirement (you’re going to need it) and you triple tax advantages.
     
  3. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    It’s indexed people. It’s not the president making this call. It’s written into the internal revenue code.
     
  4. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    Different limits. You have deferral/Roth limits and annual addition limits. The latter includes deferral and Roth and any employer contributions (match or profit sharing) and traditional aftertax (non-Roth) contributions combined.
     
  5. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    There are income limits for 401(k)s as well.
     
  6. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    No government looks at the future taxes. They literally view any current breaks as tax expenditures (not kidding). So even if you’re going to pay taxes in the future they still only look at the current lost revenue.
     
  7. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    No, it’s really revenue driven. They police the wealthy by implementing adp/acp, 410(b), and 401(a) nondiscrimination testing.
     
  8. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    In my opinion the real problem is employers abdicated responsibility for helping their less sophisticated employees when they all abandoned defined benefit plans years ago in favor of defined contribution (like 401(k)) which places the primary burden on people who don’t know what they’re doing. 401(k) plans were meant to be supplemental to defined benefit plans, not meant to carry the full weight of retirement saving. It’s a shame.
     
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  9. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    Very smart. They’ll thank you later in life.
     
  10. Russ Smith

    Russ Smith The Original Whizzinator Contributor

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    My girlfriends company automatically increases her 401K contribution every year unless she opts to have them not increase it. I actually like it but yeah the issue with 401K's is most people have no clue what funds they're in. THey just pick a couple that sound good with no idea what they are and leave them there. As long as you have stocks in them and you wait long enough they will go up over time, but you can lose a ton of potential money by picking the wrong funds.
     
  11. AZCrazy

    AZCrazy Registered

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    What bothers me is that whether or not a person can maximally save for retirement is based on a private choice their employer makes, whether they choose to offer a 401k or not.

    Anyone can open an IRA, but those are limited even now to $6000 per year. If your employer chooses to offer a 401k, now you can magically save an additional $19000 per year more than other people, pre tax. My employer doesn't feel like offering one. Great.
     
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  12. Russ Smith

    Russ Smith The Original Whizzinator Contributor

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    yep and if you'er lucky and they do offer one, then you're often limited to the investment choices they offer which are usually quite slim.

    I have had a 401K of some sort or another for over 30 years and you're absolutely right, contributing to it and getting matching has been a HUGE factor in my ability to save money.
     
  13. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    Yes auto features are the future for retirement savings. Auto enroll, auto escalation, and target date funds (diversified and wind down in equity as approach retirement). They attempt to take the decision making off the individual. I preach these daily. It’s the industry’s attempt to DB-ize the 401(k). But even with all that the 401(k) is still a limited creature for retirement savings.
     
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  14. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

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    Yes that’s also a big problem. Again it gets back to the government viewing it as a tax expenditure. There’s really no reason why an employer sponsored 401(k) should allow greater tax-advantages savings than an IRA.
     
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  15. AZCB34

    AZCB34 Registered User

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    There should be a mechanism for employees who aren't offered retirement plans at their employer to save on a similar type investment.

    They key with all these things is getting started early. Allow time and compounding interest to work in your favor. Also, try to putt away as much as you can...even if it is in a non-retirement account (use tax advantaged investments like index funds?

    AZCrazy, had your employer given any indication why they won't offer some sort of retirement plan? I assume they are concerned with cost but there are options that create very little cost to them other than a minimal matching contribution
     
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