Future of 401ks

[SAJ-99]

I try not to post things in haste, but this idea seems to have gained traction on both sides lately. A couple of links below for those that want to dive deeper (The Bloomberg Opinion might have paywall, although I tried gift it). I generally think this is a bad idea.

In summary, one side wants to tax your income now and put it into the Social Security system (questionable idea), and the other side wants to tax your income to reduce deficits, because the worker isn't taxed enough apparently.

"There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?"

Don't worry, there isn't a lot of support laid out in the opinion except wonky economic theory with guesses on impacts. Given this is an election year, this is something you might want to add to the list of things to check a candidate on.

Your 401(k) Will Be Gone Within a Decade

The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.

www.bloomberg.com

The Case for Using Subsidies for Retirement Plans to Fix Social Security

crr.bc.edu

 

[Mallardsx2]

401k's are not going anywhere. People are too stupid to understand smart withdrawal rates and the govt is crushing it on taxes due to RMD's hitting the unknowing and shoving people into higher tax brackets. The average American couldn't even tell you what tax bracket they are even in, let alone make a smart decision to allow them to stay within a lower tax bracket during retirement years with SS coming in..... the govt is feeding on this stupidity.

We have a serious overspending problem in our government. Thats what's really happening. Fire half of the federal workers. That should help. I can think of a few that I would start with.

 

[Deleted member 28227]

I try not to post things in haste, but this idea seems to have gained traction on both sides lately. A couple of links below for those that want to dive deeper (The Bloomberg Opinion might have paywall, although I tried gift it). I generally think this is a bad idea.

In summary, one side wants to tax your income now and put it into the Social Security system (questionable idea), and the other side wants to tax your income to reduce deficits, because the worker isn't taxed enough apparently.

"There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?"

Don't worry, there isn't a lot of support laid out in the opinion except wonky economic theory with guesses on impacts. Given this is an election year, this is something you might want to add to the list of things to check a candidate on.

Your 401(k) Will Be Gone Within a Decade

The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.

www.bloomberg.com

The Case for Using Subsidies for Retirement Plans to Fix Social Security

crr.bc.edu

Heaven forbid we tax corporations…

 

[sclancy27]

I try not to post things in haste, but this idea seems to have gained traction on both sides lately. A couple of links below for those that want to dive deeper (The Bloomberg Opinion might have paywall, although I tried gift it). I generally think this is a bad idea.

In summary, one side wants to tax your income now and put it into the Social Security system (questionable idea), and the other side wants to tax your income to reduce deficits, because the worker isn't taxed enough apparently.

"There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?"

Don't worry, there isn't a lot of support laid out in the opinion except wonky economic theory with guesses on impacts. Given this is an election year, this is something you might want to add to the list of things to check a candidate on.

Your 401(k) Will Be Gone Within a Decade

The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.

www.bloomberg.com

The Case for Using Subsidies for Retirement Plans to Fix Social Security

crr.bc.edu

American's barely save for retirement with it.....

 

[SAJ-99]

Heaven forbid we tax corporations…

Or capital gains at the same rate as income...

 

[Deleted member 28227]

Or capital gains at the same rate as income...

Exactly, 401ks seem like a battle that would take way too much political capital v. benefit

 

[TN2shot07]

Heaven forbid we tax corporations…

Or capital gains at the same rate as income...

I’m not against either but I don’t think more income solves the stupidity going on with spending…

 

[sccritterkiller]

I am not paying attention until they start talking about letting me opt out of SS. Honestly a chimp could invest that money better than the government....

They have been taking money out of my check for 30+ years and every election cycle I hear vote for this asshat or SS going to go broke...

 

[Forkyfinder]

American's barely save for retirement with it.....

Yeah. 50 ish percent blows my mind. You cant afford not to - and almost every employer ive ever heard of matches.

 

[Irrelevant]

What a friggin' dumb idea. Of all the graft in the system why is the hell would anyone think to eliminate retirement plans?

 

[noharleyyet]

What a friggin' dumb idea. Of all the graft in the system why is the hell would anyone think to eliminate retirement plans?

Ah but they ain't scheming how to eliminate ruling class parachutes.

 

[KB_]

I have a hard time agreeing with any ideas coming from congress. Especially since they cannot itemize what they are already spending. At this point I think the mob would of ran this country better. What a mess.

 

[SAJ-99]

I’m not against either but I don’t think more income solves the stupidity going on with spending…

There are lots of spending that can be looked at, but that isn't this discussion. This is about taxing all your work-related income now rather than letting you save some for the future on a pre-tax basis.

I am not paying attention until they start talking about letting me opt out of SS. Honestly a chimp could invest that money better than the government....

Social security is NOT a retirement program. It is an insurance program. The government only invests that money in US treasuries. It doesn't have a goal of maximizing returns like you do in your retirement account. Its purpose is being a safety net as you get old and are less able to work. The fact this wasn't repeatedly stated to every American for the last 90 years is the basic problem.

American's barely save for retirement with it.....

I would argue that is because American's income levels haven't kept pace (that and the inability to delay gratification to the future). Those people that make more income than necessary for daily living are able to save. Those that don't make enough find it impossible to save. Changing 401k does nothing for this except tax the savings today of workers that have put themselves in a positive position.

Note the author of the Bloomberg opinion wrote one recently very much against the wealth-tax.

 

[406dn]

You could argue we have a spending problem...or a taxation problem. Likely some of both. Most people like the amount of spending, they just prefer not having to pay for all of it.

It is so much easier for politicians pass legislation that creates a program than to adjust the tax rates to cover the new spending.

About forty years ago, Republicans made good political hay by labeling Democrats as tax and spenders. Something Repubicans have not really been tagged with is they pass tax cuts, and leave the spending as is.

At the end of the day, we get exactly the government we deserve.

 

[Mallardsx2]

Heaven forbid we tax corporations…

Ya, that should help with inflation. lol

 

[BigHornRam]

 

[jimh406]

Several of you guys don’t seem to understand taxes and are only repeating left talking points. Your media has done a great job with your brainwashing.

Anyway, I agree nothing is happening with 401Ks. There is support from both sides to keep the status quo.

 

[sccritterkiller]

Social security is NOT a retirement program. It is an insurance program. The government only invests that money in US treasuries. It doesn't have a goal of maximizing returns like you do in your retirement account. Its purpose is being a safety net as you get old and are less able to work. The fact this wasn't repeatedly stated to every American for the last 90 years is the basic problem.

I never said it was a retirement plan and I don't need shitty govt insurance..You could put what's been withheld from checks for last 30yrs in a simple savings account and I would be better off. I can garuantee if you have worked for a living you won't get out of SS what you have already put in. It's a pyramid scheme ran by the government only fools believe it's a retirement plan.

 

[BuzzH]

What a friggin' dumb idea. Of all the graft in the system why is the hell would anyone think to eliminate retirement plans?

Don't underestimate, they did it with pensions. The goal is to make you work until you die.

 

[Trial153]

It won’t matter in the least, when the deal is done and the lobbyist write the codes and laws we can be sure of a few things.
1) The financial industry will ensure it gets its pound of flesh, and have loopholes to avoid #2
2) The government take a cut
3 ) Joe American won’t care