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Forbes
6 days ago
- Business
- Forbes
ACA Premiums Are Set To Spike For Some In 2026—How To Lock In Savings Now
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Millions of Americans could lose a tax credit that saves them thousands of dollars on ACA Marketplace health insurance by the end of the year. The tax credit, initially expanded under the American Rescue Plan during the pandemic and later extended through 2025 by the Inflation Reduction Act, saw expanded eligibility beyond the income cap of 400% of the federal poverty level starting in 2021. These subsidies capped out-of-pocket premiums to no more than 8.5% of income for those who qualified. Unless Congress acts, the expanded eligibility will expire at the end of the year, creating what experts are calling a 'subsidy cliff' for enrollees with incomes above the 400% income threshold. The 2024 Open Enrollment report from the Centers for Medicare and Medicaid Services found enrollees at 400% of the federal poverty level saved an annual average of $4,248 on their health premiums. Losing eligibility for this tax credit could leave many Americans facing unaffordable health insurance costs. The Centers for Medicare and Medicaid Services reports the subsidy expansion of the tax credit led to increased enrollment in the ACA Marketplace, particularly in low-income communities and states that hadn't previously embraced the program. According to Kaiser Family Foundation, since 2020, enrollment in the ACA Marketplace has more than doubled, with 88% of the total growth—11.4 million out of 12.9 million new enrollees—in enrollment came from states won by Trump in 2024. States like Texas, Mississippi, West Virginia and Georgia saw their enrollment numbers more than triple. A household of two earning up to $84,600 (400% of the poverty level) currently qualifies for the tax credit. But if their income increases in 2026, they'll lose their eligibility that saves them $500 on monthly health insurance premiums—or $6,000 annually. 'It's one of the more lucrative credits that are out there for individual taxpayers,' says Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo. Talks to extend the enhanced tax credit have stalled in Congress, with House Republicans 'balking' at the thought, according to a Politico report . That means households already teetering past 400% of the federal poverty line—or those that know they'll exceed it next year—need to start making a financial plan now to stay within the income threshold limits. The battle, financial experts say, begins at the tax office. A few potential tax planning steps to take include: Tax loss harvesting : This investment method means investors sell investments that have lost value to help cancel out the taxes on their gains. Look at your portfolio to identify investments that are down and see if selling them could lower your tax bill. This investment method means investors sell investments that have lost value to help cancel out the taxes on their gains. Look at your portfolio to identify investments that are down and see if selling them could lower your tax bill. Leverage health savings accounts : You can claim tax deductions through contributions made to a health-savings account (HSA). With the new tax law that passed under the One Big Beautiful Bill Act, all Bronze and catastrophic plans under the ACA are considered HSA-eligible, starting in 2026. 'For single-filers, you can contribute $4,300, for families, the maximum is $8,550. There's a $1,000 catch-up contribution for those 55 and older, so you can effectively reduce and back away from the cliff by that amount,' says Lucas. You can claim tax deductions through contributions made to a health-savings account (HSA). With the new tax law that passed under the One Big Beautiful Bill Act, all Bronze and catastrophic plans under the ACA are considered HSA-eligible, starting in 2026. 'For single-filers, you can contribute $4,300, for families, the maximum is $8,550. There's a $1,000 catch-up contribution for those 55 and older, so you can effectively reduce and back away from the cliff by that amount,' says Lucas. Max out retirement contributions in tax-deductible accounts: One of the most effective ways to lower your taxable income is to contribute to a 401(k) or IRA, which offer upfront tax breaks. In 2025, individuals can contribute up to $23,500 to a 401(k) (plus an extra $7,500 if you're 50 or older), and up to $7,000 to a traditional IRA ($8,000 with the catch-up). 'This deferral of earnings will lower your taxable income exposure,' said Bill Shafransky, a senior wealth advisor at Moneco Advisors and a member of the Financial Planning Association. Lucas recommended turning to tax experts and services that can help enrollees navigate the 'complicated' process to keep their income within means. While individuals can and should file using free or low-cost tax software , a little expertise could go a long way. 'This is going to potentially be thousands of dollars in cost, so always talk to a professional who knows the ins and outs of this,' says Lucas. 'Open enrollment is coming up pretty soon in November, so start planning now.'
Yahoo
10-05-2025
- Business
- Yahoo
Interested In The New 'Super-Funding' 401k Opportunity? Here's How To Know If You Qualify
401(k) funding changes for 2025 now allow investors of a certain age to contribute $11,250 in catch-up funds This super-funding opportunity is available to investors ages 60-63 The changes are good news for Gen X'ers in particular, as only 54% believe they are financially prepared for retirement The IRS has introduced some 401(k) funding changes for 2025 that allow older investors to contribute additional funds to their plans. According to a survey by Northwestern Mutual, Americans need $1.26 million to retire comfortably. Among Gen X'ers, who are approaching their retirement years, only 54% believe that they will be financially prepared for retirement when the time comes. Don't Miss: Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo, told CNBC these new changes are a "super-funding" opportunity for older investors, offering them an opportunity to catch up. What exactly the changes are, and who qualifies for them, hasn't been entirely clear. Catherine Valega, a CFP and founder of Green Bee Advisory, told CNBC, that it will take time for people to become aware of the new opportunities, and that at this point "no one knows about the extra increase." So here's a more precise breakdown of the "super-funding" opportunities and who qualifies for them. In 2025, the IRS has set 401(k) contribution limits to $23,500 for investors of all ages, up $500 from 2024. Older contributors, ages 50 and up, can contribute an additional $7,500 in "catch-up contributions" to their 401(k). This totals out to $31,000 for the year, a cap that remains unchanged since 2024. Trending: Many are using retirement income calculators to check if they're on pace — But for contributors who are 61, 62, or 63, a change under the Secure 2.0 Act of 2022 has increased the catch-up contributions from $7,500 to $11,250. This means that the total cap for investors in their early 60s sits at $34,750 for 2025. It's important to note that the age eligibility is determined by how old you'll be by Dec. 31. So if you're 59 at the start of 2025 and will turn 60 before year-end, you're eligible for the increased catch-up contributions. However, if you're currently 63, turning 64 by the end of December, you are not eligible. Dan Galli, a CFP and owner of Daniel J. Galli & Associates, told CNBC that the higher 401(k) catch-up rates are "a great tool in the toolbox." However, they're not ones that many people are using. According to data from Vanguard's "How America Saves" report, only 15% of eligible employees utilized these catch-up options in 2023. Fidelity told the outlet that 3% of retirement plans haven't added the feature for 2025, meaning catch-up contributions will stop at $7,500. So it's important that you speak to a financial advisor if you plan to take advantage of the change to ensure you're able to make the most of it. Read Next:Donald Trump just announced a $500 billion AI infrastructure deal — . Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Interested In The New 'Super-Funding' 401k Opportunity? Here's How To Know If You Qualify originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Business Mayor
02-05-2025
- Business
- Business Mayor
There's a new 'super funding' limit for some 401(k) savers in 2025. Here's who qualifies
Richvintage | E+ | Getty Images If you're an older investor and eager to save more for retirement, there's a big 401(k) change for 2025 that could help boost your portfolio, experts say. Americans expect they will need $1.26 million to retire comfortably, and more than half expect to outlive their savings, according to a Northwestern Mutual survey, which polled more than 4,600 adults in January. But starting this year, some older workers can leverage a 401(k) 'super funding' opportunity to help them catch up, Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida, previously told CNBC. Here's a look at other stories impacting the financial advisor business. Here's what investors need to know about this new 401(k) feature for 2025. Higher 'catch-up contributions' For 2025, you can defer up to $23,500 into your 401(k), plus an extra $7,500 if you're age 50 and older, known as 'catch-up contributions.' Thanks to Secure 2.0, the 401(k) catch-up limit has jumped to $11,250 for workers age 60 to 63 in 2025. That brings the max deferral limit to $34,750 for these investors. Here's the 2025 catch-up limit by age: 50-59: $7,500 60-63: $11,250 64-plus: $7,500 However, 3% of retirement plans haven't added the feature for 2025, according to Fidelity data. For those plans, catch-up contributions will automatically stop once deferrals reach $7,500, the company told CNBC. Of course, many workers can't afford to max out 401(k) employee deferrals or make catch-up contributions, experts say. For plans offering catch-up contributions, only 15% of employees participated in 2023, according to the latest data from Vanguard's How America Saves report. 'A great tool in the toolbox' The higher 401(k) catch-up is 'a great tool in the toolbox,' especially for higher earners looking for a tax deduction, said Dan Galli, a CFP and owner of Daniel J. Galli & Associates in Norwell, Massachusetts. While pretax 401(k) contributions offer an up-front tax break, you'll owe regular income taxes on withdrawals, depending on your future tax bracket. However, your eligibility for higher 401(k) catch-up contributions hinges what age you'll be on Dec. 31, Galli explained. For example, if you're age 59 early in 2025 and turn 60 in December, you can make the catch-up, he said. Conversely, you can't make the contribution if you're 63 now and will be 64 by year-end. On top of 401(k) catch-up contributions, big savers could also consider after-tax deferrals, which is another lesser-known feature. But only 22% of employer plans offered the feature in 2023, according to the Vanguard report. READ SOURCE
CNBC
02-05-2025
- Business
- CNBC
There's a new 'super funding' limit for some 401(k) savers in 2025. Here's who qualifies
If you're an older investor and eager to save more for retirement, there's a big 401(k) change for 2025 that could help boost your portfolio, experts say. Americans expect they will need $1.26 million to retire comfortably, and more than half expect to outlive their savings, according to a Northwestern Mutual survey, which polled more than 4,600 adults in January. But starting this year, some older workers can leverage a 401(k) "super funding" opportunity to help them catch up, Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida, previously told CNBC. Here's a look at other stories impacting the financial advisor business. Here's what investors need to know about this new 401(k) feature for 2025. For 2025, you can defer up to $23,500 into your 401(k), plus an extra $7,500 if you're age 50 and older, known as "catch-up contributions." Thanks to Secure 2.0, the 401(k) catch-up limit has jumped to $11,250 for workers age 60 to 63 in 2025. That brings the max deferral limit to $34,750 for these investors. However, 3% of retirement plans haven't added the feature for 2025, according to Fidelity data. For those plans, catch-up contributions will automatically stop once deferrals reach $7,500, the company told CNBC. Of course, many workers can't afford to max out 401(k) employee deferrals or make catch-up contributions, experts say. For plans offering catch-up contributions, only 15% of employees participated in 2023, according to the latest data from Vanguard's How America Saves report. The higher 401(k) catch-up is "a great tool in the toolbox," especially for higher earners looking for a tax deduction, said Dan Galli, a CFP and owner of Daniel J. Galli & Associates in Norwell, Massachusetts. While pretax 401(k) contributions offer an up-front tax break, you'll owe regular income taxes on withdrawals, depending on your future tax bracket. However, your eligibility for higher 401(k) catch-up contributions hinges what age you'll be on Dec. 31, Galli explained. For example, if you're age 59 early in 2025 and turn 60 in December, you can make the catch-up, he said. Conversely, you can't make the contribution if you're 63 now and will be 64 by year-end. On top of 401(k) catch-up contributions, big savers could also consider after-tax deferrals, which is another lesser-known feature. But only 22% of employer plans offered the feature in 2023, according to the Vanguard report.
