President Donald Trump tweeted Monday there will be no change to a popular retirement savings plan under the new GOP tax bill.
“There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!” Trump said in a tweet.
Right now, taxpayers can set aside a certain amount in 401(k) retirement savings plans without paying taxes up front. Recent discussion has raised lowering that tax-deferred amount in order to boost tax revenue.
Meanwhile, the Internal Revenue Service has announced higher contribution limits for 2018.
Next year, workers can contribute up to $18,500 in their 401(k), up from $18,000 for 2017. For those age 50 or older, a so-called catchup contribution of $6,000 is permitted for a total of $24,500.
Lawmakers discussed reducing that tax-deductible amount to as low as $2,400, according to published reports. That’s below the $5,500 allowed for Individual Retirement Accounts (with a $1,000 catchup contribution for those age 50 and older).