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Global Tokenized Real Estate Market Could Explode to $4T by 2035, Deloitte Forecasts

Filed Under: BUSINESS, Coindesk

Real estate tokenization—once a niche experiment—may soon become a core pillar of how property is financed, owned and traded, according to a Thursday report by Deloitte Center for Financial Services.

The market of tokenized real estate could reach $4 trillion by 2035, growing at a compound annual rate of 27% from the current size of under $300 billion, the firm forecasted.

Tokenized real estate market growth projection (Deloitte)

Tokenization of real-world assets (RWA) is a red-hot sector at the intersection of crypto tech and traditional finance. It consists of creating digital versions of assets like bonds, funds and real estate, that represent ownerships on blockchain rails.
The process offers operational efficiencies, cheaper and faster settlements and broader investor access.

For the real estate sector, tokenization’s appeal lies in its ability to automate and simplify complex financial agreements, the report explained, such as launching a real estate fund on-chain with coded rules handling ownership transfers and capital flows. An example for this is Kin Capital’s $100 million real estate debt fund tokenization platform Chintai with trust-deed-based lending, Deloitte noted.

The report outlines a three-pronged evolution of tokenized property: private real estate funds, securitized loan ownership, and under-construction or undeveloped land projects. Of these, tokenized debt securities are expected to dominate, hitting $2.39 trillion in value by 2035, based on the report’s forecast. Private funds could contribute around $1 trillion, while land development assets may account for some $500 billion.

(Deloitte)

Despite the advantages, challenges remain, the report noted, especially around regulation, asset custody, cybersecurity and default scenarios.

Read more: Tokenized Funds’ Rapid Growth Comes With Red Flags: Moody’s

El Salvador’s Top Crypto Regulator Meets With U.S. SEC: ‘It Was Very Refreshing’

Filed Under: BUSINESS, Coindesk

El Salvador’s Comisión Nacional de Activos Digitales (CNAD), the agency in charge of regulating digital assets in the Central American nation, is seeking to establish a cross-border regulatory sandbox with the U.S. Securities and Exchange Commission (SEC).

“We want to create international collaboration,” Juan Carlos Reyes, president of the CNAD, told CoinDesk in an interview. “Our biggest message is that digital assets don’t have any geographical barriers. Collaboration with regulators should not have international barriers either.”

El Salvador is in a unique situation in that it did not boast of strong financial institutions, or even of an existing ecosystem of developers, when President Nayib Bukele made bitcoin legal tender in 2021. That means the CNAD was able to start with a blank slate when it introduced a regulatory framework tailored to crypto.

Almost two years later after Reyes took over the agency, El Salvador’s advanced regulatory framework has incentivized crypto giants such as Tether, Bitfinex and Binance to open shop in the country.

The idea, Reyes said, is for the U.S. SEC to now use El Salvador as a live, real-world case study to evaluate streamlined regulatory approaches for digital assets — in other words, for the SEC to learn from El Salvador’s experience as it revamps its own regulatory framework in a post-Gensler world.

The pilot program proposed by the CNAD involves different scenarios: a U.S.-licensed traditional finance broker obtaining a digital asset license under CNAD regulations, and the development of two small-scale tokenization offerings facilitated by a CNAD-licensed tokenization company. Each scenario would be capped at $10,000.

These initiatives would support some of the objectives laid out by SEC Commissioner Hester Peirce in February, when she wrote that the SEC Crypto Task Force, which she now leads, would take a very different approach towards crypto regulation from here on out.

“CNAD really looked at [Pierce’s document] with a critical eye as to how we can help,” Erica Perkin, owner of The Perkin Law Firm and a member of CNAD’s advisory group, told CoinDesk. “We’re here. There’s data [the SEC] might want to collect. It’s difficult to collect in the U.S. … We’ve built a framework that’s nimble enough to work on the exact issues that the SEC is looking at, and we’re here to help and collect information on how we can best do that.”

The CNAD met with the SEC’s Crypto Task Force on April 22 to discuss the initiative. The meeting was constructive, according to Reyes and Perkin. “They asked good questions,” Perkin said. “They’re in an information-gathering phase. They were engaged and open to discussion.”

Reyes has already signed regulatory cooperation agreements with countries such as Argentina and Paraguay. In his view, the SEC seems to be ahead of the curve when it comes to understanding the regulatory needs of digital assets, whereas regulators in other jurisdictions have tended to see crypto regulation from a traditional finance perspective.

“The quality of people that make up the SEC Crypto Task Force is quite impressive. They get it. They understand the technology,” Reyes said. “We were able to have discussions that were on point about what’s needed in order to regulate the technology… It was very refreshing.”

Senator and Ex-Bridgewater CEO McCormick Invests More in Bitcoin as Bill in Works

Filed Under: BUSINESS, Coindesk

U.S. Senator Dave McCormick, the former chief executive of massive hedge fund Bridgewater Associates, is putting his own cash into bitcoin (BTC) as the committee he’s on is at the tip of the spear for a legislative effort to regulate the digital assets industry.

McCormick has made repeated recent investments in the Bitwise Bitcoin ETF worth hundreds of thousands of dollars, according to disclosures this week. Because of the ranges used in such lawmaker disclosures, the latest amounts invested last month can only be said to be between $310,000 and $700,000.

The new investment follows McCormick’s disclosure of as much as $450,000 in the Bitwise ETF in February, potentially bringing his total investment closer to a million. His investments represent the bulk of bitcoin investing in Congress this year. Representative Marjorie Taylor Greene, a Georgia Republican, invested a much smaller amount, favoring BlackRock’s iShares Bitcoin Trust (IBIT).

The Republican senator from Pennsylvania, who has held a series of high-profile government posts throughout his career, is new to the Senate and was put on the Senate Banking’s Committee’s subcommittee that deals with digital assets. That’s the group of lawmakers likely closest to the coming action on crypto legislation that’s expected to move this year.

As a Senate candidate last year, the former hedge fund exec argued America needed to lead on crypto. He said during the subcommittee’s first digital assets hearing in February, “This Congress must work alongside President Trump to pass bipartisan digital asset legislation that will guide the future of innovation and secure a robust economic future for the U.S.”

While his bitcoin stake is outpacing other lawmakers, he’s been putting the bulk of his investments in municipal securities in recent months, the disclosures show.

Read More: Congress’ Most Prolific Crypto Trader Is a Georgia Trucking Operator

Income Limits for 401(k)s: Highly Compensated Employees

Filed Under: BUSINESS, Investopedia

There are lesser-known 401(k) limits for well-paid employees

Fact checked by Vikki Velasquez
Reviewed by Khadija Khartit

The Internal Revenue Service (IRS) sets limits for employer-sponsored 401(k) plans, such as the maximum annual employee contribution limit and the maximum employer contribution limit. Some of these limits apply to 401(k) contributions of employees who earn high salaries.

Here, we’ll explain more about the 401(k) limits for highly compensated employees (HCEs), including how they work.

Key Takeaways

  • The Internal Revenue Service (IRS) has several income limits that apply to 401(k) plans.
  • Some limits apply to highly compensated employees (HCEs), who are defined as employees who earn more than $160,000 for 2025 (up from $155,000 for 2024) and, in some cases, are in the top 20% of earners at the firm—or they own more than 5% of the business. 
  • The IRS limits the amount of income on which an employer can offer a matching contribution. That limit is $350,000 in 2025, up from $345,000 in 2024.

What Are Highly Compensated Employees?

Highly compensated employees (HCEs) are employees who earn more than the IRS maximum allowable compensation for a 401(k) of $160,000 for 2025 (up from $155,000 for 2024), or who own more than 5% of a business. Employers can also designate the top 20% of earners in the company as HCEs, as long as these employees meet the same income requirements.

For most employees, the most relevant limit that applies to a 401(k) is what the IRS calls the salary deferral limit. This is the amount of money that you can put into your 401(k) every year, and on which you don’t pay tax until you withdraw it in retirement. In 2025, this limit is $23,500 if you are under age 50, and $31,000 if you are 50 or older, including the catch-up contribution of $7,500. In 2024, those numbers were $23,000 and $30,500, respectively.

Other limits that the IRS places on 401(k) plans apply only to HCEs. Not all 401(k) plans have HCE participants. But for those that do, HCEs affect the way that a plan works in several ways.

First, the IRS requires that all 401(k) plans take a nondiscrimination test every year. By examining the contributions made by HCEs, the test determines whether all employees are treated fairly through the company’s 401(k) plan. These nondiscrimination stipulations are in place so that employee retirement plans do not discriminate in favor of HCEs.

Important

The IRS imposes a limit on the amount of income on which your employer can offer a contribution match. This limit is $350,000 in 2025.

Income and Contribution Limits for 401(k) Plans

There are two main types of income limits for 401(k) plans that mainly apply to HCEs: matching contribution limits and absolute limits. Let’s look at how both limits can affect HCEs. 

Matching Contribution Limits

HCEs can face a 401(k) limit on the amount of income on which their employer can offer a contribution match. That limit is $350,000 in 2025. It’s a $5,000 increase to the previous year.

An example of how this contribution limit applies: say your salary is $500,000 and your employer offers a 100% match of your contributions, up to 5% of total compensation. The contribution limit is $23,500 regardless of income level, and you elect to contribute the maximum. You might expect your employer would be obligated to match your $23,500 contribution, since that figure is under 5% of your total income. But this is where the matching contribution limit applies. Because the IRS limits the amount of income that your employer can match, you can only receive matching contributions on 5% of $350,000. This means that your employer would contribute $17,500, not $23,000.

Absolute Limits

The second type of income limit that’s relevant here is an absolute limit on the amount that can be added to your 401(k) per year from all sources. In 2025, this limit is either 100% of your salary or $70,000 if you are under age 50. This is a $1,000 increase from the previous year. If you’re 50 or older, you have an absolute limit of $79,000 or 100% of your salary. In 2024, the limit was $76,500.

In practice, this limit only applies to two types of employees:

  • HCEs whose employer has a generous 401(k) plan
  • Self-employed individuals who are both the employer and employee for a solo 401(k) plan

What Happens if a 401(k) Fails Testing?

When a 401(k) plan fails nondiscrimination testing, it signals that HCEs may be contributing disproportionately compared to their NHCE peers. For HCEs, the most immediate impact of a failed test is the possibility of receiving a refund of excess contributions.

While it might sound like a windfall, it’s often a setback—especially if the refund is issued after the tax year has closed. These returned contributions are not only taxable in the year they’re distributed, but they also lose out on the opportunity for tax-deferred growth within the retirement account. Worse, if the correction isn’t made on time, the plan could face penalties or even disqualification from the IRS.

Employers face compliance issues when a plan fails testing. They are required to take corrective actions promptly—either by issuing HCE refunds or making additional contributions to NHCEs to even out the ratios. Repeated failures can also cause dissatisfaction among HCEs who are frustrated by the limits on their retirement contributions, potentially undermining the benefit’s appeal.

Strategies to Maximize Retirement Savings

HCEs can use a Mega Backdoor Roth IRA, which allows HCEs to contribute significantly more to a Roth IRA than the traditional annual limit permits. This strategy involves making after-tax contributions to a 401(k), then converting those funds into a Roth account. When implemented correctly, it enables potentially tax-free growth on large contributions, far beyond what a typical Roth IRA would allow.

Another approach involves after-tax contributions within a 401(k). Not to be confused with Roth contributions, these after-tax contributions can often be rolled over into a Roth IRA. For those with access, deferred compensation plans are also worth exploring. These allow HCEs to set aside a portion of their income to be taxed in retirement, when they may be in a lower tax bracket, offering potential long-term tax savings.

Finally, HCEs should not overlook Health Savings Accounts (HSAs) as a retirement planning tool. HSAs offer triple tax benefits: contributions are tax-deductible, growth is tax-free, and withdrawals are tax-free when used for qualified medical expenses. Because healthcare is a major retirement expense, funding an HSA to the maximum each year can prove just as valuable as a 401(k) in the long run.

What Does HCE Mean?

Highly compensated employees (HCEs) are employees who are earning more than $160,000 in 2025, or who own more than 5% of a business. Employers can also name the top 20% of earners in the firm as HCEs, as long as they’re also making over $160,000 for 2025. (In 2024, HCEs had to earn at least $155,000 per year.)

Are There Income Limits on 401(k) Plans?

The salary deferral limit—how much an employee can contribute to a 401(k) per year—is unaffected by income. However, the IRS limits the amount of income on which an employer can offer a matching contribution. For 2025, it’s $350,000; in 2024, it was $345,000. There is also an absolute limit, which is the total of all contributions to a 401(k) plan. For 2025, it’s $70,000 if you are under 50 years old; in 2024, it was $69,000.) If you’re 50 years old or older, it’s $79,000; in 2024, it was $76,500. And it can’t exceed the amount of your salary.

Are There Age Limits on 401(k) Plans?

Your 401(k) contributions can be affected by age. If you are 50 or older, you can make an extra contribution—a catch-up contribution—to your 401(k) account for a total of $7,500 per year. This raises the absolute contribution limit to $79,000.

The Bottom Line

Several income limits apply to 401(k) plans, including limits that mainly apply to highly compensated employees, also known as HCEs. HCEs are employees who earned more than $160,000 in 2025, or who own more than 5% of a business.

The IRS limits the amount of income on which an employer can offer a matching contribution to $350,000 in 2025. There is also an absolute limit of $79,000 on the total of all contributions to a 401(k) plan if you’re over 50. If you’re under 50, it’s $70,000. These limits only apply to a small percentage of employees.