The protection sought with Section 79 of the U.S. Internal Revenue Code is going backward.
In the novel The Curious Case of Benjamin Button by F. Scott Fitzgerald, Benjamin Button is born an old man and mysteriously begins aging backward, much like the protection sought with Section 79 of the U.S. Internal Revenue Code is going backward. It was established in 1954 ~ 70 years ago ~ to allow employers to provide group term life insurance coverage to their employees without the premiums being taxed as income. The $50,000 limit as a threshold for coverage limit was to provide years of financial security. Now, not so much.
Family Income in the United States: 1954
Average (median) family income in the United States was estimated at $4,200 in 1954. The $50,000 limit provided 11.9 years of income.
Family Income in the United States: 2024
Average (median) family income in the United States is estimated at $59,428 in 2024. The $50,000 limit now doesn’t even provide one year of income.
What is the 1954 limit of $50,000 worth today?
Adjusted for inflation $50,000 in 1954 is worth $570,159.85.
Using 2024 Family Income what should the limit be now?
Using the 2024 income average of $59,428 and providing 11.9 years of income the tax free limit should be $707,476.
