House tax chief says he plans to preserve 401(k) pretax limits
(Bloomberg) — House Ways and Means Chairman Kevin Brady says he doesn’t plan to reduce the pretax contributions American workers can make to 401(k) retirement plans -- “unless there’s broad agreement” among investment advisers that a different system would lead workers to save more.
“It will either be strengthened or enlarged or left pretty much as is,” Brady told reporters Tuesday afternoon.
House tax writers, who plan to release a bill Wednesday, are looking for ways to increase revenue to help offset deep rate cuts for businesses and individuals. In that context, tax writers have studied changing 401(k) contributions to limit pretax contributions.
Currently, individuals can contribute as much as $18,000 a year from pretax wages to such plans -- and those over 50 can contribute as much as $24,000.