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I agree that there's too much added complexity in the tax-code but do you really feel that this requirement is that onerous? The likely motivation being being
by iaw 10y ago
I agree that there's too much added complexity in the tax-code but do you really feel that this requirement is that onerous?
The likely motivation being being in line with those around 401k account requirements: if a company uses this, it should be to the benefits of the employees and not just the executive staff.
- edoceo 10y agoIt's complicated but this one rule is OK. Repeat * 100000 = Mess!
- ericd 10y ago401k plans are very annoying to administer, much more so than, say, a SEP IRA.
- SilasX 10y ago401ks are itself a convoluted mess. They should just say, "hey, if you work, you can invest it tax-deductible and tax-deferred". The current system is, "if you work, then you should be able to participate in your caricatured, mustache-twirling, ultra-rich boss's tax-deferred plan, in accordance with all these rules and exceptions that clumsily try to make him share his bottomless wealth with you."
- st3v3r 10y ago"They should just say, "hey, if you work, you can invest it tax-deductible and tax-deferred"." That's called an IRA.
- SilasX 10y agoExcept that, if your employer offers a 401k at all, you lose the tax deduction benefits (if income over 70k). And the contribution limits are much lower. http://www.fool.com/retirement/ira-vs-401k-which-is-better-for-you.aspx http://www.fool.com/retirement/ira-vs-401k-which-is-better-f...
- harryh 10y agoThe 401k rules are awful and incentive giving benefits (matching) that are more valuable to richer employees than poorer ones. It's insane.