US. Congressional Scrooges want to cut 401(k) contribution limit
The holiday season is fast approaching. It is a time most people feel more generous to loved ones or to the less fortunate. Not so when it comes to Congress.
If lawmakers have their way, taxpayers may have to work longer in their lives, work more hours or have to take more risk in the investment markets to live the retirement they envision now.
This is what reducing the 401(k) plan contribution limit could mean. This is what Congress is calling “tax reform.”
A person can make a contribution to his or her 401(k) plan of a maximum of $18,000 (in 2018, this is slated to be increased to $18,500). This contribution is tax-deferred. In other words, you don’t pay tax on the $18,000 of income you earned and contributed into your 401(k) plan.
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