Daily Money - Joe Biden's Plan for Your 401(k)

Elizabeth O'Brien is a senior writer at Money

Under the current system, higher earners get a fatter tax break for their retirement contributions than lower earners do. For example, a worker in the top tax bracket of 37% receives a $37 tax benefit for every $100 contributed to a traditional 401(k), while someone in the 10% bracket only gets a $10 tax benefit for the same contribution. You could argue higher earners deserve a bigger break to go with their bigger tax burden, or you could reason that lower-earners need more help since they have less money to put away. Joe Biden has a plan to tweak the 401(k) deduction so it doesn’t proportionately favor higher earners. Learn more about it in today’s edition, and read about the fix that some experts say would really be effective in getting more workers to save for retirement.

Best wishes,

Elizabeth

P.S. If you got this newsletter from a friend, sign up here for email delivery to make sure you don't miss the next issue. To listen on podcast platforms or smart speakers, click here.

TIMELY RETIREMENT NEWS, INSIGHTS, AND ADVICE

What Joe Biden’s Tax Proposal Could Mean for Your 401(k)

It aims to equalize the tax benefits that high earners disproportionately enjoy under the current system.

Debts as Low as $25 Could Stop Millions of Students From Returning to College

Schools are withholding transcripts, needed for transfers, due to outstanding debts.

Credit Card Welcome Offers Disappeared for Months. Now, Bonus Deals Are Back in a Big Way

Here’s how to take advantage of them.

RETIRE WITH MONEY COMMUNITY INSIGHTS

This week in our Retire with Money Facebook group, a member posted this, “Officially retired after 31 years as the customer service manager of a great company on 9/29/20. I feel like a fish out of water — our travel plans on hold 😞. How long does it take to sink in? I feel like I’m on vacation.” All good questions! One man responded, “Everyone is different. Make lists of big and little things you wanna do, from garage clean-out to visit China to bake fruitcake to go to a movie. Add to it daily. Cross at least one thing off each day as you complete it. Save the list to look back on.” One said, “Breathe and enjoy your time!” Former Money editor Rachel Elson (who is now studying to be a certified financial planner!) made an interesting observation: “I know two people who had just retired in the last year or so, and who promptly unretired (at least part time) this spring because there was so little opportunity to take advantage of the free time…”

HOW TO TAKE CONTROL OF YOUR RETIREMENT

No matter where you are in your career, saving for retirement should be part of your plan. Even if you can save only a small percentage of your income, it's important to get into the habit of saving regularly—ideally in a tax-advantaged retirement account, such as an IRA or a 401(k). Try to work up to saving at least 15% of your pretax income for retirement, including any match from your employer. Investing for growth can be an important next step. Over time, investment growth and compounding returns can help boost your savings and help you feel more prepared for everything from unexpected health care expenses to inflation and longevity. Fidelity is here to help you get ready for retirement.

Here's the first thing you should do

Investing involves risk, including risk of loss.

RETIREMENT NEWS FROM AROUND THE WEB

A 102-Year Old Woman Who Has Never Missed a Vote Casts Her Ballot in Full PPE

Beatrice Lumpkin, who cast her first ballot for Franklin D. Roosevelt, didn’t let a pandemic stop her this election. CBS NEWS

5 Things to Know About a COVID Vaccine

A vaccine won’t be a ‘magic wand,’ but it will play an important role in stemming the pandemic. KAISER HEALTH NEWS

A Shocking Number of High Earners Have no Retirement Savings

Setting money aside is a problem across income levels, a report finds. THE MOTLEY FOOL

Retired Wall Street Exec Discovers Benefits of Fitness at 70

Exercise confers enormous physical and mental benefits, and it’s never too late to start. NEXT AVENUE

Elizabeth O'Brien is deputy editor at Money. She has covered retirement and health care for nearly a decade. A Brooklyn resident and mom of two boys, she navigates the alphabet soup of Medicare and the New York City subway system with equal ease. You can email her at elizabeth.obrien@money.com and follow her on Twitter at @elizobrien.

This newsletter is free because Money earns a commission when you click or make purchases from the links in this email and on our site. We also receive compensation for some of the products and services featured in this message. Offers may be subject to change without notice. Learn more about how we make money.

Privacy Policy • Advertise With Us • We're Hiring!

You can update your email preferences or unsubscribe by clicking here.

Copyright ©2020 Ad Practitioners, LLC. All rights reserved.

Metro Office Park Calle 1, Building 7 Suite 204, Guaynabo, 00968 Puerto Rico, USA

Daily Money - Joe Biden's Plan for Your 401(k)

Older messages

Debts as Low as $25 Could Stop Millions of Students From Returning to College

Placeholder: Plan a Trip for Your Mental Health

What Will Happen to the Stock Market if There's No Clear Winner on Election Night?

Joe Biden’s Tax Plan: Who Would Benefit Most From His Proposed Tax Credits?

Where Will You Fall in the K-shaped Recovery

You Might Also Like

After inauguration, it's time to talk taxes

Harry's Take 1-15-25 Stocks Look to Break Lower: Another Sign of a Top on December 16

🇺🇸 America's tariff future

It’s a new year, get a new savings account

Private Equity Is Coming for Your 401(k)

This Skateboarding Economist Suggests We Need More Skateparks And Less Capitalism

Elon Musk Dreams, Mode Mobile Delivers

Shaping inflation expectations: the effects of monetary policy

🌎 Another hottest year

Have you seen the Best Cars & Trucks of 2025?