We put the money into the wrong box and most of it was being contributed via a Roth mechanism. Furthermore, while annual IRA contribution limits held steady this year ($5,500 for workers under 50 and $6,500 for those 50 and older), the yearly contribution limits for 401(k)s got a boost going into 2018. Sure enough. (E.g. Bpttom Line: This “greed is good” mentality is causing salary inequities that hurt the hard-working and productive middle class. I’m blaming our government for making that the correct answer. The government will just tax you more than you can save. Using this technique, you would give the same amount to charitble causes ($25,000 per year on average). For example, who needs the $400+ iphone 6+ or Apple watch? Manage Your Finances In One Place: One of the best ways to become financially independent is to get a handle on your finances by signing up with Personal Capital. President Obama thinks every individual making above $200,000 a year is rich, regardless of location. This site uses Akismet to reduce spam. The problem, however, was that the credit started phasing out at $75,000 in income for single tax filers, and $110,000 for couples filing taxes jointly. I know it sounds a little a bizarre and privileged. Alright, now that you’ve got the basics. America needs a resurgence of work ethic and can-do attitude. The answer is not to increase taxes on invested income. They sure took that money real quick. These aren’t exactly levels of assistance any human being with their self interest in mind would strive for. You also get a tax exclusion on the first $100K of income or so, and no state taxes. The only way out of this mess is to change our culture. My family aims to give at least 10% of our taxable income each year to charity. PS corporations don’t pay taxes. I’m not blaming the poor for intelligently deciding it’s a lot easier to not work. By the same token, stress below this level takes the form of worry about not meeting your goals, such as savings targets, college expenses for your children, etc. And just to clarify, I didn’t say “politically correct”, just “correct”. They usually have two piles. He retired in 2012 with the help of his retirement income that now generates roughly $250,000 passively. Updated for 2019 and beyond. You will pay Social Security tax on the full $200,000 income even though the maximum taxable income for Social Security is $117,000 in 2014 (goes up to $118,500 in 2015) because your client and the government doesn’t know about your other income earning activities until you file. Going forward, our mortgage interest deduction will be less and less each year. As for my biases and prejudices, if anything I said does not resonate with you as correct, I’d like to better understand your point of view. I agree with everything you’ve said in this thread. It’s free housing (section 8), free utilities, free health insurance, free car, free Obama-phone, etc. Take it from the IRS. I would need to hire more nurses, technicians and admin staff. I can contribute $19500 to my 403B and $19500 to a 457b. It forces you to understand your household’s cash flow, how different sources of income is taxed, and how moving through various income levels affects net, realized money.