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Wharton – How a Lower 401(k) Cap Could Cause More Harm Than Good

[email protected] – “The Republican tax overhaul is a plan in search of revenue – and one solution that appears to be under consideration for covering the proposed cuts is lowering the cap on pre-tax contributions to 401(k) retirement savings plans. More than 62 million Americans have put money into 401(k) retirement plans, according to The Washington Post. Currently, those under age 50 can contribute up to $18,000 annually pretax, while older workers can contribute up to $6,000 more per year. Republicans are set to unveil their tax bill this week, and there is speculation that the legislation will include a reduction in the pretax contribution limit – which would boost government coffers by directing more money to post-tax individual retirement accounts, such as Roth IRAs…”

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