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re: Can someone explain the highly compensated employee 401k rule
Posted on 6/30/15 at 7:38 am to Jabstep
Posted on 6/30/15 at 7:38 am to Jabstep
quote:The rules are complicated and well intended, but they are not fair. When is it fair to have someone's taxable income determined by the decisions of other people acting in what they perceive to be their own self-interest? Would you like your taxable income to be dependent on a decision I make, or the other posters' on this board make collectively?
The ADP/ACP test is complicated but fair and well intended.
2
Posted on 6/30/15 at 7:46 am to Poodlebrain
My wife and I are both capped at 6%. I need to look into some other form of investment because 6% isn't going to get it done.
This post was edited on 6/30/15 at 7:47 am
Posted on 6/30/15 at 9:29 am to Poodlebrain
I meant fair in the respect that your employer doesn't create a plan to only benefit highly compensated employees. So if you're going to have a plan, it is intended to benefit all eligible employees, not a select few. If the company does a good job of educating the participants and matching contributions, these issues resolve on their own.
In my assessment of "fair" was the traditional IRA option as well (although it can be limited as well).
In my assessment of "fair" was the traditional IRA option as well (although it can be limited as well).
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