| Congress May Decrease 401k Limits To Help Pay For Health Care Pension Expert Reveals Why ... |
| Written by Mack Hayden |
| Tuesday, 15 December 2009 01:42 |
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New York, NY -- Due to the negative inflation rate, or deflation, Americans may be forced to save less money in their 401ks next year. However Congress may not prevent 401ks limits from decreasing in order to raise taxes to pay for health care reform. The Consumer Price Index (CPI) is a measure of the average change in prices over time. The CPI is based on the prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and other goods and services that people buy for day-to-day living. Compared to last year's prices, the average price for goods and services has fallen by 2.1% As a result, the maximum contribution to a 401k might drop from $16,500 to $16,000 for individuals younger than 50, and the catch up contribution for the 50+ market might decline from $5,500 to $5,000. This would not the first time 401k limits have decreased," says Brett Goldstein, a Plainview, New York-based pension administrator and President of The Pension Department Inc. "When 401ks started in 1981, Congress feared that wealthy business owners would use 401ks as a major tax deduction. The passage of the Tax Reform Act of 1986 decreased 401k contributions from $30,000 to $7,000." The average household income in the United States is $50,233, according to the U.S. Census Bureau. Financial surveys state that the average 401k contribution is only 5-7% of salary and that 93% of Americans do not contribute the maximum amount. Thus decreasing the 401k limits does not affect the majority of Americans. The Obama Administration needs to raise taxes to bring down the deficit and help pay for health care reform," says Brett. "However raising taxes when the economy is in a recession is harmful. Since only 7% of Americans contribute the maximum to their 401k, this is a great way to raise taxes without hurting the economy." About Brett Goldstein: Brett Goldstein is available for interview: In the Greater New York City area; nationwide by arrangement via telephone; available for interviews in print or broadcast. Contact: ### Add this page to your favorite Social Bookmarking websites |
