President Joe Biden recently announced the American Families Plan. Biden proposes paying for the AFP by increasing the capital gains tax rate from 23.8 percent to 43.4 percent (including a surtax) for households earning more than $1 million per year.
Many small-business owners donât make $1 million in their best year until they sell their business (as part of this proposal, capital gains tax is considered income).
Suppose you had planned on selling your company to retire. In that case, you might have to work another five to 10 years to save up for the retirement you envisioned.
Under the new tax law, if you sell your business for $10 million, nearly $2 million of your after-tax proceeds is vaporized. It is imperative that you reduce your tax burden to counter this blow.
Senators reintroduce bill to boost SIMPLE plans
Bloomberg
The U.S. Capitol and Library of Congress stand in this aerial photograph taken above Washington, D.C.
Bipartisan legislation that would allow small businesses to more easily access SIMPLE retirement savings accounts for their employees was reintroduced Wednesday by Sens. Susan Collins, R-Maine, and Mark Warner, D-Va.
SIMPLE (Savings Incentive Match Plan for Employees) retirement plans were created in 1996 as a lower-cost alternative to traditional 401(k) accounts. The SIMPLE Plan Modernization Act would permit employers with 100 or fewer employees to create SIMPLE savings accounts if they do not sponsor another retirement plan and increase the contribution limit to $16,500 from the current $13,500 for employers with 25 or fewer employees. Those with 26 to 100 employees could adopt the higher contribution limits, with some limits.
Are you financially prepared for retirement? 8 steps to take
By Josh Patoka article
Are you trying to figure out how to afford retirement? Here are several ways to increase your retirement savings. (iStock)
If you want to save more money in 2021, you’re not alone. A Fidelity Investments study found that 44% of Americans want to boost their savings rate.
Increasing your retirement savings can be your ultimate money goal this year, as one survey found that 27% of respondents stopped saving for retirement in 2020. Another one-quarter (26%) of Americans still need to start saving for retirement, according to a Federal Reserve study.
Lawmakers renew push to increase SIMPLE plan contributions
The legislation would bump up the annual contribution limit, taking it from the current maximum of $13,500 to $16,500. Sens. Susan Collins and Mark Warne note the proposed increase is the midpoint between SIMPLE plans and traditional 401(k)s.
April 21, 2021
Sens. Susan Collins, R-Me., and Mark Warner, D-Va., are again pursuing an update for SIMPLE plans, seeking to expand access and increase how much retirement savers can contribute.
On Wednesday, the senators introduced a bill, the SIMPLE Modernization Act, which they also floated in the prior two Congresses. The two prior iterations of the bill died in committee.
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