Dialing Back Your 401K - New York News

The Willis Report

Dialing Back Your 401K

Posted: Updated:

Hold onto your hats: A proposal coming from the White House could impact your 401(k) and not in a good way. President Obama plans to ask Congress to reduce tax benefits for 401(k) investors, particularly higher earners.  And the proposal doesn't stop there. The president also wants to limit the value of all tax deductions and IRA deductions to 28 percent of income. Catch-up investors for retirement would be hardest hit by these rules were they to become law.

Experts say that households caught in the crosshairs would be singles earning $183,000 or more and couples earning $225,000 and more.

The proposal, which is sure to reduce savings if it becomes law, comes even as Americans are pitifully under saved for retirement. According to Boston College's Center for Retirement Research, the average 401(k) and IRA balance for people over 55 years of age is just $42,000. What's more, just five percent of the roughly 60 million 401(k) plan participants contribute the maximum amount to their 401(k) of $17,500 for people under 50 and $23,000 for people 50 and older. 

"You don't strengthen the caboose by weakening the engine, it's a bizarre point of view ," says Ric Edelman, a financial advisor and author of "The Truth about Retirement Plans and  IRAs. "We need to be creating incentives for people to save for retirement, not putting ceilings on them  to discourage them from saving."

What's surprising is that the administration would look to raise the tax hit on retirement savings rather than increase it. The administration says that wealthier Americans will save for retirement regardless of whether they get tax breaks for doing so, but in many parts of the country, the earnings levels that are targeted -- $225,000 for a couple, for example – aren't high wage earners, but middle class earners.

What's more, the President's proposal has the possibility of reducing retirement options for people in all wage categories, if small business owners decide to drop company 401(k)s, rather than deal with the changes.

  • Local NewsLocal NewsMore>>

  • New Jersey sues over Florida pizza shop logo

    New Jersey sues over Florida pizza shop logo

    The New Jersey Turnpike Authority wants a Florida pizza shop to pay a big toll for using a logo similar to the iconic Garden State Parkway's green and yellow signs.
    The New Jersey Turnpike Authority wants a Florida pizza shop to pay a big toll for using a logo similar to the iconic Garden State Parkway's green and yellow signs.
  • Suspect arrested in dismembered Brooklyn woman murder case

    Suspect arrested in dismembered Brooklyn woman murder case

    Thursday, July 24 2014 8:08 AM EDT2014-07-24 12:08:03 GMT
    Police say they arrested and charged a suspect in connection with the murder of a Brooklyn woman whose body parts were discovered in Bay Shore. Suffolk County homicide squad and the US Marshals NY/NJ Regional Fugitive Task Force arrested Leah Cuevas, 42, on Wednesday night. Cuevas lived on 346 Sumpter Ave. in Brooklyn, the same address as the victim, Chinelle Latoya Thompson Browne, 27. Cuevas was charged with second-degree murder and held overnight at Suffolk's Fourth Precinct.
    Police say they arrested and charged a suspect in connection with the murder of a Brooklyn woman whose body parts were discovered in Bay Shore. Suffolk County homicide squad and the US Marshals NY/NJ Regional Fugitive Task Force arrested Leah Cuevas, 42, on Wednesday night. Cuevas lived on 346 Sumpter Ave. in Brooklyn, the same address as the victim, Chinelle Latoya Thompson Browne, 27. Cuevas was charged with second-degree murder and held overnight at Suffolk's Fourth Precinct.
  • Bratton: 'not happy'

    NYPD identify suspects in raising of white flags at Brooklyn Bridge

    NYPD identify suspects in raising of white flags at Brooklyn Bridge

    Thursday, July 24 2014 7:48 AM EDT2014-07-24 11:48:41 GMT
    The NYPD says they have identified the suspects for the major security breach that had white flags replace the American flags at the Brooklyn Bridge, one of the most highly secured landmarks in New York City, according to the New York Post. Police say they only know the suspects by nicknames, not their legitimate names. They are working on getting their names in order to bring the suspects in for questioning. The Post says nearly three dozen detectives were on the case. 
    The NYPD says they have identified the suspects for the major security breach that had white flags replace the American flags at the Brooklyn Bridge, one of the most highly secured landmarks in New York City, according to the New York Post. Police say they only know the suspects by nicknames, not their legitimate names. They are working on getting their names in order to bring the suspects in for questioning. The Post says nearly three dozen detectives were on the case. 
  • PoliticsMore>>

  • President Obama Returns To LA For Fundraisers

    President Obama Returns To LA For Fundraisers

    Wednesday, July 23 2014 6:00 PM EDT2014-07-23 22:00:25 GMT
    President Barack Obama is scheduled to arrive aboard Air Force One at Los Angeles International Airport this afternoon for a planned 24 1/2-hour visit to conduct two political fundraisers and speak at Los Angeles Trade-Technical College.
    President Barack Obama is scheduled to arrive aboard Air Force One at Los Angeles International Airport this afternoon for a planned 24 1/2-hour visit to conduct two political fundraisers and speak at Los Angeles Trade-Technical College.
  • Agents Get Subsidized 'Obamacare' Using Fake IDs

    Agents Get Subsidized 'Obamacare' Using Fake IDs

    Wednesday, July 23 2014 12:57 PM EDT2014-07-23 16:57:39 GMT
    Undercover investigators using fake identities were able to secure taxpayer-subsidized health insurance under President Barack Obama's health care law, congressional investigators said Wednesday.
    Undercover investigators using fake identities were able to secure taxpayer-subsidized health insurance under President Barack Obama's health care law, congressional investigators said Wednesday.
  • Congressman Adam Schiff: These Are Tough Situations To Deal With

    Congressman Adam Schiff: These Are Tough Situations To Deal With

    Monday, July 21 2014 10:40 AM EDT2014-07-21 14:40:38 GMT
    Pick a spot on the globe and there seems to be a crisis the United States is dealing with.Joining us to discuss the situations in the Middle East and the Ukraine was Congressman Adam Schiff.
    Pick a spot on the globe and there seems to be a crisis the United States is dealing with.Joining us to discuss the situations in the Middle East and the Ukraine was Congressman Adam Schiff.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices