House Democrats propose new retirement plan rules for the rich, including contribution limits and a repeal of Roth conversions

[LIBrty4all 3,749]

"Elect Biden", they said. "We won't increase your taxes", they said.  But they will limit what you can save, and deplete Social Security even sooner than expected.

 

https://www.cnbc.com/2021/09/13/house-democrats-propose-new-retirement-plan-rules-for-the-wealthy.html

[Dashinka 24,492]

But they are only taxing the rich and those big bad greedy corporations that will definitely not pass it on to their customers as a hidden tax on everyone.

Edited September 14, 2021 by Dashinka

[LIBrty4all 3,749]

It's far from just the rich, though they will be affected as well.

[laylalex 7,284]

Errrr, the $400k threshold has not changed -- they were always clear that taxes would increase for people earning over $400,000 per year. 

[LIBrty4all 3,749]

Err, that has nothing to do with what I posted.  This affects millions more Americans who make under $400k.

[laylalex 7,284]

16 minutes ago, LIBrty4all said:

Err, that has nothing to do with what I posted.  This affects millions more Americans who make under $400k.

How many millions of Americans use mega-backdoor Roths? Do you have a figure?

[LIBrty4all 3,749]

23 minutes ago, laylalex said:

How many millions of Americans use mega-backdoor Roths? Do you have a figure?

I do not, since most Americans don't share their finances with me.  I know that in my company alone, there are more than 4,000 people doing them.  It's really not all that hard to understand.  And eliminating the back door or the mega back door Roth is not the same thing as promising not to raise taxes, is it?  Once does not need to make more than $400k to qualify.  In fact, the income cap on contributions stops at $290,000.  

 

As of 2017, about 43% of all 401k plans offer the option for mega backdoor Roths.  I'll let you do your own math.  Don't forget to account for family members.  It will get... convoluted.  But my point is still valid.

Edited September 15, 2021 by LIBrty4all

[laylalex 7,284]

Okay, fair point. But the question is whether the full complement of people within those 43% of plans actually take them up. (Full disclosure -- I have a mega-backdoor Roth IRA, not a 401k.) 

 

I think we all were expecting the wealthy to have to cough up more. I suppose my argument is that not much of this should come as any surprise.

[LIBrty4all 3,749]

Of course you do.   

 

"Coughing up more"???  Losing the ability to save money for retirement is NOT coughing up more.  And no, the rich should NOT have to pay more taxes.  A flat is actually the most fair option if you think about it.  But if you want to lose the ability to save for retirement, good for you.  I for one do not like the government limiting me.

[LIBrty4all 3,749]

2 hours ago, laylalex said:

Okay, fair point. But the question is whether the full complement of people within those 43% of plans actually take them up. (Full disclosure -- I have a mega-backdoor Roth IRA, not a 401k.) 

 

I think we all were expecting the wealthy to have to cough up more. I suppose my argument is that not much of this should come as any surprise.

And what will you do with all that money that you are no longer allowed to invest towards retirement?

[Ban Hammer 13,334]

it's always amusing when someone is telling another person they don't need to have

- that much money.
- that big of a car

- that big of a house

and so on

[LIBrty4all 3,749]

6 hours ago, laylalex said:

Okay, fair point. But the question is whether the full complement of people within those 43% of plans actually take them up. (Full disclosure -- I have a mega-backdoor Roth IRA, not a 401k.) 

 

I think we all were expecting the wealthy to have to cough up more. I suppose my argument is that not much of this should come as any surprise.

How do you have a mega backdoor Roth without a 401k?  Unless there is some new tax law of which I am unaware, you cannot even make mega contributions until you max out the $19,500 limit of a 401k.  

 

Perhaps you meant to say a backdoor Roth, not a mega?

[LIBrty4all 3,749]

On 9/14/2021 at 8:22 PM, laylalex said:

Okay, fair point. But the question is whether the full complement of people within those 43% of plans actually take them up. (Full disclosure -- I have a mega-backdoor Roth IRA, not a 401k.) 

 

I think we all were expecting the wealthy to have to cough up more. I suppose my argument is that not much of this should come as any surprise.

Trying one more time, in the interest of accuracy.

[LIBrty4all 3,749]

Exactly as I thought.

[TBoneTX 45,273]

It would be so much simpler to revert to their new, improved IRS Form 1040:

 

Line 1a.  How much money did you make last year?   $_____________

Line 1b.  Send it in.