I'm not a fan of 401(k)s, which themselves are a sad giant scam, but that topic for another day.
Suspend belief for a few minutes, and pretend that 401(k)s are a good way to prepare for retirement. You know, that “retirement” where the amount paid by Social “Security” diminishes in value every year, just as it has since the 1980s if not earlier, since it doesn't keep up with the real rate of inflation. Made worse with the economy tanking since the 1973 “Arab Oil Embargo”, and the gradual destruction of the US industrial base led by steel and motor vehicles.
The IRS, in all its glory, is giving--”Trickle Down” in action—a whopping 2.2% increase in the amount one can save for retirement through a 401(k) and not be taxed on it until it's withdrawn.
For an IRA, the increase is 7.69%. That still doesn't keep up with the real rate of inflation. What the IRS apparently doesn't like with IRAs is that you have control over your money, since you can only waste, er “invest”, a paltry $7K/year even in 2024. With a 401(k), you're betting your senior years on someone else managing your savings properly. That worked so well for those who “invested” in the Bernie Madoff scam. Letting people put their money in slot machines might give them at least a sporting chance. How many businesses tanked during the *first* round of the Scamdemic? How many people lost much or all of their 401(k) “retirement” funds as a result?
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The IRS has increased the 401(k) plan contribution limits for 2024, allowing employees to defer up to $23,000 into workplace plans, up from $22,500 in 2023.
The agency also boosted contributions for individual retirement accounts to $7,000 for 2024, up from $6,500.
IRS announces 2024 retirement account contribution limits: $23,000 for 401(k) plans, $7,000 for IRAs