Explaining the major changes to the 401k starting in 2023:
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My PO Box:
Andrei Jikh
4132 S. Rainbow Blvd # 270
Las Vegas, NV 89103
SOURCES:
irs.gov/pub/irs-drop/n-22-55.pdf
*None of this is meant to be construed as investment advice, it’s for entertainment purposes only. Links above include affiliate commission or referrals. I’m part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future….(read more)
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If you have a job, there are some major changes you need to know about, particularly with your 401k plan. The 401k plan is a retirement savings account that is predominantly offered by employers to their employees.
With the passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act in 2019, there have been several important changes that all workers need to understand.
Increase in Age Limit for Contributions
The SECURE Act has increased the age limit for individuals who can make contributions to their 401k plans. Previously, individuals aged 70 ½ and above were barred from contributing to their plans. However, with the SECURE Act, anyone at any age can now contribute to their 401k plans, as long as they are still employed.
Higher Cap Limit for Auto Enrollment
Auto-enrollment is a feature in which employees are automatically enrolled in their company’s 401k plan. The new law permits employers to increase the cap limit for auto-enrollment from 10% to 15%. This means that employees can automatically save up to 15% of their salaries in their 401k plans.
Changes to Inherited IRA Rules
Inherited IRAs are retirement plans inherited by beneficiaries after the death of the original owner. The SECURE Act has eliminated the stretch IRA provision, which permits beneficiaries to stretch out the payout of inherited IRAs over their lifetimes. Beneficiaries must now withdraw the full balance of an inherited IRA within ten years of the original owner’s death. This implies that beneficiaries may face increased taxes and higher tax brackets due to this change.
Introduction of Annuities
The new law permits employers to offer annuities as part of their 401k plans. Annuities are insurance products designed to provide income for life. An annuity can be a way to reduce the retirement risk if you have concerns about running out of money during retirement.
Summary
The SECURE Act has brought several changes, some of which provide more flexibility and accessibility, while others may require a shift in the way people plan and save for retirement. It’s important to speak with your financial advisor to ensure you have a knowledge of these changes and how they might impact you.
401k's are nothing but a scam that takes your money. You lose money by being charged for having the 401k, and every few years you lose a huge chunks of it because the rich causes downturns in the economy.
Ok Andrei but ever since the Ukraine & crisis broke out my 401K has been wiped out! Been saving for years for my retirement. 401K is deceptive if you ask me. We have had our savings dwindle with the cost of living, we are finding it impossible to replace it. My condolences to anyone like retiring in this crisis, it gets tougher by the day.
I wonder how many recent buyers have over leveraged their finances to make a purchase anticipating a quick resale and profit. Will this lead to a series of bankruptcies if we slide into a recession next year, as some analysts are predicting.
How about FTX?
This is why I hate 401k. Giant scam. Instead of guaranteed pension, we get gamblers losing our money. Will never have one. Giant scam
You work for 40yrs to have $1M in your
retirement, meanwhile some people are putting just $10K in a meme coin from just few months ago and now they are multimillionaires……
FTX?
A 9% 401k contribution increase is only the base inflation rate. It is effectively ZERO increase. Please stop contributing to the false wealth effect by calling this "massive" as so many finance outlets sloppily label this.
To think this guy asked to copy my math homework in middle school… you never needed to, you're so damn smart! Lol. Proud of you Andrei!
I am glad you are here. I do not understand any of the business of 401k
Don't listen to this guy . Don't Invest into a 401K it's a huge scam and you just get fleeced every decade. There's a reason why the wealthiest people don't have 401ks. Invest the money yourself in a brokerage or your own real estate Investments.
Could’ve been a 45 second video if the only major change was the 2k increase limit.
So I make around 125k a year my job offers tax deferred 401k and doesn’t match because I also have a pension. But they also offer Roth 401k where I have the option to max out. Is it better for me to have have tax deferred because I’ll pay less in taxs year to year or is it a better option to do Roth 401k where I could also put an extra 6,500k in vanguard on top ok my 401k Roth from work. What’s the better option, I’m thinking Roth simply because my job doesn’t match.
Hey Andrei, I sell 401ks to businesses for a living. I would be more than happy to explain your parent's situation over the phone. PS I live in Vegas
Isn't it sad that its accepted you are just going to retire poor? Why isnt the goal to retire with 100% income replacement? Sad.
401 k is a scam
Last year after doing my taxes I was forced to pull out of my roth because I contributed too much. I put around $600…. whats up with that?
What microphone are you using? It’s incredible.
The problem I ran into with the Roth IRA was that it eliminated a writeoff or two on my taxes, so I went from getting a pretty low refund to owning almost as much as I put into the Roth since I had the normal 401k contributions too. Thankfully I had a good CPA to work thru it, but it seems to be a tradeoff most videos that talk about Roth's forget to mention.
Everytime I see that fish eye zoom I laugh out loud
Income limit for Roth matters because you don't qualify for backdoor if you have funds in an existing IRA;e.g. roll-over from a prior employer. You have to liquidate your traditional IRA account first to do a backdoor, which is not the best alternative for many.
I’m surprised you didn’t mention solo 401ks for self employed. Andrei you probably qualify for that with your YouTube business.
Musk and Jeff both represent Government interests, they won't be pitted against each other unless they are tag-teaming their influence and flipping Zuckerberg and reshaping what Defines America as a Hemisphere and getting the Operation funding into the infinite areas that can be influenced.
We are already in the big crash, Inflation is a catastrophe. This CPI report is a colossal failure. To bring the market to a halt, the FED will have to pull all the stops. The unfortunate issue is that markets are being decimated. If you want to stay green, you have to rely on a lot of diversification. Currently up 17% and being careful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest.
I knew everything in this video!
-certified know it all
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