Nevin's Data "Points"

Several years ago, we had in mind that it would be fun to get an aquarium for our home, and (even) I got excited at the prospects of filling it with a variety of all kinds and sizes of exotic fish.  Sadly, those hopes were dashed when I discovered that , despite the massive displays of what appeared to be whole schools of fish in similarly sized tanks at the pet store, our specific-sized tank would only support a handful of the fish I had hoped to display. Apparently, the more fish you want to have (that live), the bigger the tank you need. The reason: they need room to thrive and grow. At long last the IRS  last week  announced the new contribution and benefit limits for 2022. Considering the run-up in inflation this year, expectations were similarly high for increases in those limits. And sure enough, among other things, the 401(k) limit was bumped $1,000 (to $20,500) and the defined benefit plan limit rose from $230,000 to $245,000, though the limit...

Thanksgiving has been called a “uniquely American” holiday, and while that may be something of an overstatement, it is unquestionably a special holiday, and one on which it seems appropriate to reflect on all for which we should be thankful. So, as I look back at this past year: I’m thankful that so many employers voluntarily choose to offer a workplace retirement plan – and that so many workers, given an opportunity to participate, do. I’m thankful that a growing number of employers have chosen to automatically enroll valued workers into these programs, and that they are increasingly opting to establish a default contribution rate in excess of the “traditional” 3%. I’m thankful that the vast majority of workers defaulted into retirement savings programs tend to remain there – and that there are mechanisms (automatic enrollment, contribution acceleration and qualified default investment alternatives) in place to help them save and invest better than they might o...

In about a month, the IRS will announce the new contribution and benefit limits for 2018 – and that could be good news even for those who don’t bump against those thresholds. These are limits that are adjusted for inflation, after all – designed to help retirement savings (and benefits) keep pace with increases in the cost of living. In other words, if today you could only defer on a pre-tax basis that same $7,000 that highly compensated workers were permitted in 1986 – well, let’s just say that you’d lose a lot of purchasing power in retirement. But since industry surveys suggest that “only” about 9%-12% currently contribute to the maximum levels, one might well wonder if raising the current limits matters. Indeed, one of the comments you hear frequently from those who want to do away with the current retirement system is that the tax incentives for 401(k)s are “upside down,” that they go primarily to those at higher income levels, who perhaps don’t need the encouragement to save....

Several months back we acquired an aquarium, and I looked forward to filling it up with all kinds and sizes of exotic fish – only to be disappointed to find out that, despite the massive displays of what appeared to be whole schools of fish in similar sized tanks at the pet store, our tank would only support a handful of the fish I had hoped to display. The reason; they need room to thrive and grow. The more fish you want to have (and live), the bigger the tank. The IRS has now announced the new contribution and benefit limits for 2015 . Most were increased, notably the annual contribution limits for 401(k), 403(b), and 457 plans (from $17,500, where it has been for the past two years, to $18,000) and the catch-up contributions for those over age 50 (from $5,500, where it has remained since 2009, to $6,000). But since industry surveys suggest that “only” about 9%-12% currently contribute to those levels, does it matter? It’s worth remembering, of course, that these adjustments ...