Project 2025, a 992-page document written by staffers of the prior President and organized by the Heritage Foundation, has the aim of reshaping the US Federal Government and consolidating power in the Executive Branch. The document is fairly controversial but I must admit I found one section I can agree with.
From Chapter 18, page 588:
Equalize retirement savings access across married households. The limit on individual contributions to a 401(k), 403(b), or similar work-based retirement account is $22,500 for 2023. Individuals who do not work or do not have access to a work-based retirement account can save up to $6,500 in an IRA. This individual-based system creates a disadvantage for married couples with only one spouse who works (or with two working spouses, one of whom earns less than the maximum retirement account contribution).
To equalize access to tax-free retirement savings for married couples, the limit for married couples on 401(k) and similar work- based retirement savings accounts should be double the limit for individuals, regardless of the allocation of work between the couple.
As I reflect on 34 years in the industry, I can say with certainty that no one has ever told me, "Timothy, I have too much money". I definitely can tell you the number of times I have heard the opposite though and those are quite heart-breaking. "Timothy. I don't have enough money. I need to keep working".
As a retirement plan advisor, I much prefer hearing, "I want to keep working because I enjoy what I do". As one employee told me at the young tender age of 76, "As long as I am physically able and mentally capable, I will keep working". The idea of sitting on the couch, watching TV was quite foreign to this employee and frankly an anathema to his work ethic.
Having said that, I like the idea of a married couple being able to max out their 401k savings. In the cited example, if one spouse is making a good deal more than the other, that spouse can possibly hit the 401k contribution limit more easily than the other. I like the idea of both having a fair shot at contributing the maximum which in 2024 is $23,000 (under age 50) and $30,500 (for the 50 and older crew including me!).
As with anything written, the devil is in the details. Is the Project proposing that one spouse might be able to direct excess income to the other spouse's 401k? This idea seems to work in the spousal IRA world where funding is from a common account (ie, a joint checking) but I am not seeing how it would work here. Putting on my very small TPA hat, I can see all kinds of testing issues arising from this. And I am sure the IRS would let out a squeak or two as it watches tax revenue slip through its fingers.
Still, I think this is one idea I would like to see kicked around more. I believe in all Americans being able to retire with dignity. I know there are many factors that make that challenging. But one of the many things that defines us as Americans is how we rise to challenges. Being able to retire with dignity means you are more self-reliant. Like I say, something to explore.