Saving for retirement is getting more expensive

Core Points - The IRS is changing tax code rules that will affect retirement savings for high earners over 50, specifically eliminating the ability to contribute extra pre-tax amounts to 401(k) plans for those earning over $145,000 annually [1][2] - High earners will now need to use Roth 401(k) accounts for additional contributions, which means they will pay taxes on this income upfront rather than at retirement when they may be in a lower tax bracket [2][3] - The new rules may push some individuals into higher tax brackets today due to the inclusion of these contributions in their taxable income, and some high earners may be ineligible to contribute to Roth IRAs due to income limits [3] Industry Insights - Financial service firms are responding to the new regulations by increasing the availability of Roth options in 401(k) plans, as many plans currently do not offer this option [3] - While the immediate impact of the new rules may be negative for some, there could be long-term benefits if market performance continues to rise, as gains on Roth investments will not be taxed [4] - A significant portion of the American population is engaged in retirement savings, but many express discomfort with their savings levels, highlighting a potential market for financial advisory services [5]