Professor Samantha Prince quoted in the Independent about new 401(k) catch-up contribution law

CARLISLE, Pa.—Professor Samantha Prince was quoted by the Independent in an article entitled “A major 401(k) change starts next year. Here’s what it means for you.”

The amount of money that individuals can annually contribute to their 401(k) plans is capped by the IRS. That cap is increased for savers age 50 or above. So, once a plan participant reaches the age of 50, they are permitted to contribute more into their 401(k) plan than those who are younger.

The article notes: “Catch-up contributions are important for workers who feel like they haven’t saved enough for retirement.” It goes on to quote Prince as saying, “At age 50, they’re closer to the milestone of being able to retire, and better situated to assess what their retirement needs are.”

Previously, the only difference for these catch-up contributions was the permissible amount. However, a new law now requires that catch-up contributions for those earning more than $145,000 will have to make their catch-ups in an after-tax form—to a Roth IRA within the company 401(k) plan. Prince explains the tax ramifications of the new law for higher-wage earners in the article.

Professor Samantha Prince is an associate professor of law. She has a Master of Laws in Taxation from Georgetown University Law Center and was a partner in a regional law firm where she handled transactional matters that ranged from an initial public offering to regular representation of a publicly traded company. A significant part of her practice was in employee benefits, including retirement plan design and operation. Her expertise from practice has fueled her research, enabling her to become an expert on 401(k) vesting schedules, employee benefits transparency, and gig work. In practice, most of her clients were small- to medium-sized businesses and entrepreneurs, including start-ups. Professor Prince brought her practice knowledge to the Law School and established the Penn State Dickinson Law entrepreneurship program. She is an advisor for the Entrepreneurship Law Certificate that is available to students and is the founder and moderator of the Inside Entrepreneurship Law blog.