If you save for retirement through a 401(k) plan, you may have noticed changes to it over the years — for example, automatic increases in your contributions and 'catch-up' amounts for the over-50 crowd:
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For simple 401 plans, which small businesses might offer, there is a contribution limit of $14,000 for 2022. The catch-up amount is $3,000. Solo 401 plans — used by the self-employed with no employees except perhaps a spouse — come with the same contribution limits as traditional 401 plans.
Under an interim rule issued by the U.S. Department of Labor that's now in effect — a final rule is expected relatively soon and it could be different — two illustrations would be provided at least once a year. One would show estimated monthly income from a single life annuity and the other from a joint annuity with benefits for a surviving spouse.
House Ways and Means Chairman Richard Neal, D-Mass., sent a letter to the Labor Department in late 2020 in response to the interim rule, asking that there be additional assumptions — i.e., investment returns — included in the information provided to 401 participants."Pretty much everyone agrees it's useful information, but how you provide it is the sticking point," said Craig Copeland, a senior research associate with the Employee Benefit Research Institute.
"But people also say they are interested in a guaranteed source of income in retirement," Copeland said."So, that makes it tough." Any time between age 59½ and age 72, you would have the option to roll over that portion into a fixed annuity offered by BlackRock's insurance partners. Fixed annuities generally provide a minimum guaranteed rate of return on your principal.
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