Proposed Retirement Cap: More People Could Be Affected Down the Road
One of the more controversial (at least in financial circles) items to come out of the budget recently proposed by the Obama Administration is a cap on retirement accounts.
The idea is to cap retirement accounts, preventing further contributions to tax-advantaged accounts. The reasoning is that, at a certain level, enough is saved up for a “reasonable” retirement and there is no more need for the tax advantage.
Presumably, instead of contributing to tax-deferred accounts, those who reached the cap would no longer be able to take advantage of the savings, and pay taxes on that income, instead of getting a tax deduction. (Of course, there are issues surrounding the fact that, eventually, taxes would have been collected on the money if it were withdrawn from a tax-deferred account down the road.)
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College graduation is rapidly approaching for many students. Soon, graduates will be starting new jobs, and learning about how to operate in the “real” world. They will be leaving
One of the more interesting bits of data to come to my attention recently is the implication that young professionals are confident about their chances for a comfortable retirement.
One of the questions facing the members of Gen Y is this: Will I be ready for retirement?
When I was in my mid-twenties, I switched jobs moving from one defense contractor to another. My former employer, Northrop Grumman, offered a dozen or so investment options in the 401(k) and, all things considered, it was a pretty good plan. The fees were a little high but not so much so that you felt ripped off and the options were fair – not too many funds and not too few.
When it comes to making retirement account contributions, it makes sense to carefully consider your options, and weigh your choices.
I’ve been fortunate in that every employer I’ve ever worked for has offered a 401(k) defined contribution plan. I know that many people are not so lucky and reader Jennifer is one of them. Many smaller businesses can’t afford to set up a plan or simply don’t want to. Whatever the reason, Jennifer doesn’t have the option available to her. This week’s


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