By Jair Argueta
Congress will be changing how traditional 401(k)s will be working which are retirement accounts that employers use to put up their employees money up for retirement pre-tax. This money can be withdrawn at the age of 59 ½ which when you take out you will have to pay taxes on. Congress will also be changing how ROTH IRAs will work as well as this retirement account works in a different way as you put money post-tax but this money will not be taxed on when withdrawn. Congress wants to change as retirement accounts will not only be limited to specific stocks but a multiple of assets such as real estate, cryptocurrency, etc. Although this will all come to a cost of management, all of what has been stated is for the 401(k) accounts. Now for the changes for ROTH IRAs these will now be automatically enrolled for the employees although you can always opt out, they will also have penalty free withdrawals as in you will be able to withdraw which would be a maximum of $1,000 without having to pay taxes on that money. For example if you or a relative had a medical emergency, and you would have a limited time frame of a year to be able to put that money back in before its taxed. Also people over the age of 50 will also be able to put an extra $1,000 into their account and this could be exponential as you could have the chance to put more money in accounting to CPI and the catch up for those of the age of 50 will also have their catch up increased. Now going back to what was said about being able to invest in different types of investments, the average investor makes just enough to keep up with inflation and giving this many opportunities could be catastrophic for those who don't know what they’re doing and could risk their entire investment portfolio.
Now for us younger folks, we will now be less likely to succeed in this, according to a recent article. We will now need about 3 million dollars to be able to retire comfortably and this would give you an income of about 120-150 thousand dollars per year and this is so high because according to the article inflation will be much more high at that point and as of the state of the economy right now it may seem possible. However, to invest in this music you would need to invest about $833 per month for about 40 years to be able to achieve that 3 million dollar mark, although you could always invest more as your income increases.