Changes roll out every year, and every year clients should take an extra few minutes looking over the details of their 401K in Colusa. The changes for 2016 are mostly marginal, accounting for Saver’s Credit changes and a few flexibility withdrawal details. What has changed in 2016 for 401Ks for middle-class Americans?
The Contribution Changes? Minor
Firstly, what hasn’t changed? Any increase on contribution on 401K in Colusa has been extremely small in 2016. The reason has a lot to do with the overall cost-of-living index. Contribution increases for retirement accounts are justified by the cost-of-living index. Comparatively, increases must be legally authorized and justified. This would not stop a 401K provider from offering a personalized increase depending on the overall situation of the client. But, as for across-the-board contribution boosts, it’s rather minor.
Switchover Changes
There are significant changes for individuals that want to move their funds from retirement accounts to a simple IRA. The simple IRA needed to be active (and contributed to in some regard) within the last 24 months. This is a change that helps individuals who are downsizing and reallocating the funds that they want immediately accessible. The flexibility increases include changes in the limits that can be moved and the number of times a movement can be made in a given month.
Any changes that occurred in 2016 will affect small subgroups and not have a large universal impact on any majority of 401K accountholders. For example, public safety workers are able to receive additional funds without penalty after age 50. Charitable donations in a QCD format are also permanent. This means that a tax-free exchange can be made to a charity at age 70+ without having to deal with previous limitations. But, these details are not universal and the changes reflect concerns for niche groups in 401K’s.
A 401K agent can walk clients through all these small details to see if they impact an account for the future. The above is not a full assessment of the 2016 changes. Contact us to see how a specific account has possibly changed due to limits, policy alterations, and other actions in 2016.
