Politics Your 401(K)

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Denny Crane

Denny Crane

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There's talk that the new tax plan will limit 401(K) contributions to $2400. I'm not sure if that is $4800 per married couple or not.

On one hand, the 401(K) plan is one of the most incentivized means of saving for a dignified retirement.

On the other hand, the people who have 401(K) tend to be the upper quintile, and they don't need extra help from the government. The trend is for companies to not match contributions anymore. The extra tax revenue will offset some/much/all of the proposed tax cuts.

https://qz.com/1112734/the-unpopula...contributions-in-the-republican-tax-cut-plan/

upload_2017-10-29_18-12-8.png

The 401(k) plan disproportionately benefits the highest-earning Americans because they have the most money to save. A 2013 analysis by the Congressional Budget Office found that two-thirds of the tax benefits went to the top 20% of earners.
 
Denny Crane said:
There's talk that the new tax plan will limit 401(K) contributions to $2400. I'm not sure if that is $4800 per married couple or not.

On one hand, the 401(K) plan is one of the most incentivized means of saving for a dignified retirement.

On the other hand, the people who have 401(K) tend to be the upper quintile, and they don't need extra help from the government. The trend is for companies to not match contributions anymore. The extra tax revenue will offset some/much/all of the proposed tax cuts.

https://qz.com/1112734/the-unpopula...contributions-in-the-republican-tax-cut-plan/

View attachment 16779

The 401(k) plan disproportionately benefits the highest-earning Americans because they have the most money to save. A 2013 analysis by the Congressional Budget Office found that two-thirds of the tax benefits went to the top 20% of earners.
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People just suck at managing their finances.
 
Once people find TIAA, they can expect a great retirement.
 
Isn't there something obvious going on here though? By getting the revenue now instead of later from future taxes on 401K disbursements isn't it just another way of robbing the future to pay for the present. The other thing I wonder about is whether or not this will disincentivize saving, which creates another set of problems.

I'm all in favor of reigning in spending and overhauling the tax code, but color me unimpressed with the parts of the plan I've seen so far.
 
This also means that individuals may pay higher tax rates, because the money gets taxed while they have employment income rather than while they are retired.

barfo
 
It is true that it is better off workers who have 401(k). First, not all companies offer, second, a person has to have enough income to set aside. I worked at a place with a 410(k) but we were paid so little that just meeting basic expenses covered every penny I got.

The way the tax structure works, basically, is that savers put the money aside pre-tax. When the money is, hopefully (ask Enron workers) paid out, it is taxed at lower rate.
If you cut the amount that can be put aside pre-tax, it cuts into either current income, since it would cost more to set money aside now, or into retirement income, if people save less.

Denny has said that it's the upper quintile that has 401(k) and he does not think we (yes, I am now one of those with an account) need government help.

But if the people making, say, $80K per year don't need government help, why the HELL do the very rich need a $1.5 TRILLION tax cut? It is estimated, and only an estimate since he hides taxes from his employer, us, that Trump would gain $23 million under the Republican tax plan. So, Denny, you are saying I don't need government "help" but he does? And pay for it by gutting Medicare and Medicaid?
 
Man that sucks for working people if this happens. Back before the 401K was made available in the Tax code, I could find no way to save a damn thing!
With two kids in college and paying a combined State and Fed tax of 75% or more, there was nothing to save.

The 401K became available right after the federal tax rates where lowered to approximately where they are today, which made it possible to have some money to save in the 401k. (about 35 years ago)

I guess, I don't know how the hell they expect working poeple to ever retire, with defined pension plans gone and now also making it more difficult for people to save in the 401k.

Although, I also don't really trust the 401k system very much either. There is a lot of money sitting there waiting for the right legal plan to raid it. A lot people lose a lot of money in the 401k when the markets tank. It's just gone too.
 
The proposed 401K change is progressive. It's taking away a tax break mostly for those making over $131K.


upload_2017-10-30_12-11-49.png
 
stampedehero said:
Once people find TIAA, they can expect a great retirement.
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I’m not sure what TIAA is, and I haven’t looked at any of this tax stuff because I know that it doesn’t affect my 5 year goals.

But what I have always thought was funny, was that the average smoker spends more on cigarettes per year, than you can even put in a 401k... not to mention all the other things that people like me buy; alcohol, nice cars, and just everyday extra expenses like seeing a movie.

When it comes to money in America, it’s hard for me to have pity on “poor” adults. I used to skip school because it was easier to steal food from Fred Meyers/Safeway than it was to steal food from school. I’ve figured it out, and any sane person can do the same.
 
BLAZINGGIANTS said:
Probably not, but I also didn't think Trump had a snowball's chance in hell of being elected President....
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Two different things.

He didn't need senators to vote his way to get elected.

Corker, Flake, McCain, Collins, and Murkowski. None of them will vote for the bill.

Funny how real a politician can be once they're not up for reelection.
 
Nate said:
I’m not sure what TIAA is, and I haven’t looked at any of this tax stuff because I know that it doesn’t affect my 5 year goals.

But what I have always thought was funny, was that the average smoker spends more on cigarettes per year, than you can even put in a 401k... not to mention all the other things that people like me buy; alcohol, nice cars, and just everyday extra expenses like seeing a movie.

When it comes to money in America, it’s hard for me to have pity on “poor” adults. I used to skip school because it was easier to steal food from Fred Meyers/Safeway than it was to steal food from school. I’ve figured it out, and any sane person can do the same.
Click to expand...
>TIAA started as a teacher investment organization and it expanded to foundations and universities. Their maintenance fees are absolutely reasonable. I quit smoking, buy dependable used cars and am frugal. Multiple the costs for smoking habits and it is startling!
 
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