Contributions could be reduced by 64%
The fiscal cliff negotiations include reducing the amount you can contribute to your 401(k) by up to 64%.
Americans have over $5 trillion invested in 401(k) accounts and negotiators have their eye on using some of that money. The reduction in contributions would make it harder to save for retirement.
Brett Goldstein with American Investment Planning says the reductions could cause a large drop in retirement savings for low-income workers. Employees earning less than $30,000 could see a 20% reduction in employer contributions which will hurt retirement nest eggs.
Goldstein says his firm is now recommending finding alternatives for retirement savings.