Originally Posted by
Twin Wasp
I've heard when 401k first started people would put 100% of their pay into the account. So no taxable income. Then they’d take a loan against the account to live. And there was a way to write off the loan interest. The IRS caught on fairly quickly and limited the contribution amount.
but now there is Roth 401k so you pay taxes on $19k now and withdraw hopefully thousands more in retirement tax free. If using the Roth option 100% would be available I would think. Maybe 60% restriction is precisely to make sure there is enough cash for the tax payment and other deductions. I have know idea actually as is with most things.