What Do The Changes To Retirement/Savings Rules Mean And How Will It Help Me Save More For Retirement?
Changes to retirement savings rules are being discussed in Washington which could alter best practices when it comes to saving for your future.
For savers over age 50, catch-up limits may increase for both IRA’s and workplace plans like 401k’s – helping those individuals save more for retirement. A proposal is being discussed to eliminate traditional deductible retirement savings in favor of a 26% refundable tax credit for each dollar contributed. This would have far-reaching impact. For example, it could flip conventional advice for lower income savers, making pre-tax savings more advantageous than a Roth-style approach.
These changes are only a possibility at this point – not law yet. Annex will be here to help guide you through any and all changes we see in 2021 and beyond. So, stay tuned!
– Eric Strom, CFP® Senior Financial Planner
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