What if that option becomes extinct? If some members of Congress have their way, we may see a huge cap put on the amount of money an individual can contribute to their plan each year. Currently, workers can kick in up to $18,000 a year but that amount will dwindle to just $2,400, yes, you read that right.
How is anyone suppose to save for retirement if they are utilizing a 401(k) and capping contributions at $2,400?
Some experts have said that instead of doling out cash to your 401(k) just simply put that dough in a Roth IRA...a Roth I-R WHAT? The big difference between a 401(k) and a Roth IRA is that with a Roth, the money you put in is taxed upfront so that when you do need the money you are not taxed when you withdraw or make gains in the future. The problem though, is that the verdict is still out as to if you can accrue the same amount of wealth for retirement with a Roth IRA verses a 401(k). Time to get educated on these products so you can prepare for your future accordingly.
Read more on the Wall Street Journal or leave a comment below.
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