The 401K Drives Inequality: NY Times article.

[Anonymous]

Starting in 2026 for those making over $140K, all 401K catch-up contributions must be made post-tax and placed in a Roth 401K. Boomers got the advantage of placing pre-tax dollars in the account and getting a tax deduction (sure they pay tax at the time of withdrawal...but paying taxes in prime earning years is much harsher than paying taxes in retirement).

https://www.schwab.com/learn/story/what-to-know-about-catch-up-contributions

This is just the beginning of the Boomers pulling up the ladder behind themselves.

[Anonymous]

Anonymous wrote:Starting in 2026 for those making over $140K, all 401K catch-up contributions must be made post-tax and placed in a Roth 401K. Boomers got the advantage of placing pre-tax dollars in the account and getting a tax deduction (sure they pay tax at the time of withdrawal...but paying taxes in prime earning years is much harsher than paying taxes in retirement).

https://www.schwab.com/learn/story/what-to-know-about-catch-up-contributions

This is just the beginning of the Boomers pulling up the ladder behind themselves.

For some. For us our tax bracket in retirement will be the max, same as we've been for 20+ years. So our only advantage was extra money in our pockets during the 20-50s and the tax free growth. But we defintatly won't be in a lower tax bracket at retirement

[Anonymous]

Anonymous wrote:Starting in 2026 for those making over $140K, all 401K catch-up contributions must be made post-tax and placed in a Roth 401K. Boomers got the advantage of placing pre-tax dollars in the account and getting a tax deduction (sure they pay tax at the time of withdrawal...but paying taxes in prime earning years is much harsher than paying taxes in retirement).

https://www.schwab.com/learn/story/what-to-know-about-catch-up-contributions

This is just the beginning of the Boomers pulling up the ladder behind themselves.

Exactly. While they enjoy that recent 8% social security raise…

The most self centered generation in American history.

[Anonymous]

Pensions? WTH? Pensions failed. My dad worked for a non-profit company who had a pension system in place. It declared bankruptcy and screwed everyone who worked there. He was lucky that he was young enough at the time to recover. A lot of people were really hurt by it.

SS is the baseline. Use that and save additional money for yourself. You can't rely on anyone else.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The trouble with 401k are the limits are too high. A married 50 year old couple can put in 60k a year. If they have a high income and a really good match it could equal 120k a year!!

But a middle class 50 year old man with stay at home wife and kids at best can afford 6 percent. And maybe a crappy match 50 cents on a dollar. If he makes 100k his total contribution is 7.5k a year.

Over time it is millions of dollars in difference

The limits are too low. 23k is a joke for under 50. You should just be able to contribute up to the DC max if you want

I own a business and can put away 50K/year. Thankful for that!

yeah i own my business so I can do 55k this year and my wife puts away 23k

$78k deduction saves us well over $30k in taxes each year. When I retire, I will live off my trust so my income is artificially low and pull money out of this pre tax IRA at substantially lower rates. Win all around.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Starting in 2026 for those making over $140K, all 401K catch-up contributions must be made post-tax and placed in a Roth 401K. Boomers got the advantage of placing pre-tax dollars in the account and getting a tax deduction (sure they pay tax at the time of withdrawal...but paying taxes in prime earning years is much harsher than paying taxes in retirement).

https://www.schwab.com/learn/story/what-to-know-about-catch-up-contributions

This is just the beginning of the Boomers pulling up the ladder behind themselves.

For some. For us our tax bracket in retirement will be the max, same as we've been for 20+ years. So our only advantage was extra money in our pockets during the 20-50s and the tax free growth. But we defintatly won't be in a lower tax bracket at retirement

Same. This works for us.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m a moderate Democrat. I am so sick of the increasingly liberal media crapping on any tool that was created to help the middle class and that the population actually uses to successfully to amass average wealth. 401ks replaced pensions. Now that the UMC and -gasp- upper class are tilizing them, it’s suddenly another tool in the woke lefts “oppressed be oppressor” narrative. I am so fed up. The UMC will never be taxed enough until they’ve given away all their income to be on par with someone in a career earning a quarter of what they do.

I don't think most people realized just how much the rich could abuse them until reports about Romney's $100 million retirement account came out

DP here. I don't care about Romney's retirement account. I care about my retirement account.

[Anonymous]

Anonymous wrote:Starting in 2026 for those making over $140K, all 401K catch-up contributions must be made post-tax and placed in a Roth 401K. Boomers got the advantage of placing pre-tax dollars in the account and getting a tax deduction (sure they pay tax at the time of withdrawal...but paying taxes in prime earning years is much harsher than paying taxes in retirement).

https://www.schwab.com/learn/story/what-to-know-about-catch-up-contributions

This is just the beginning of the Boomers pulling up the ladder behind themselves.

Just stop with this trite nonsense.

First, boomers are not the largest voting block anymore, and yet we are once again deciding between a couple of senile old men for president and half of our elected representatives are old and should be retired - that’s on middle aged and young people.

Second, there is no ladder. There never has been. Many if not most of our financial schemes are unsustainable. It’s not a matter of fairness, it’s just reality.

[Anonymous]

Anonymous wrote:Seems like the beginning of a new indoctrination attempt among the progressive left - subtly attacking 401ks to set up the justification for crippling them through much higher taxes down the road.

Anyway, I know the NYT well enough to do the opposite of what they tell you to do.

We should be taxing 401(k)s or at a minimum we should means test social security so that 401(k) millionaires aren't collecting social security as the system runs out of money to provide for those underprivileged people who truly need it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Seems like the beginning of a new indoctrination attempt among the progressive left - subtly attacking 401ks to set up the justification for crippling them through much higher taxes down the road.

Anyway, I know the NYT well enough to do the opposite of what they tell you to do.

We should be taxing 401(k)s or at a minimum we should means test social security so that 401(k) millionaires aren't collecting social security as the system runs out of money to provide for those underprivileged people who truly need it.

Let me understand... people who have saved a lot in their 401k and are paying a ton of taxes should not be able to collect social security that they paid into because other people didn't save enough?

I grew up lower income. I lived frugally and saved a lot. I also worked my way through a (b rated) state college so that I could graduate debt free.

So, not only do you expect us to foot the bill for those who got their college loans paid off, but also we should not be able to collect social security so that those who may have not saved as much or lived as frugally to save for retirement can still get more.

GTFO.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Gift article link:

https://www.nytimes.com/2024/05/08/magazine/401k-retirement-crisis.html?unlocked_article_code=1.qk0.FoXn.AmNofORfld_i&smid=url-share

The evidence seems clear. My family has won in this scenario as have many of those who post here. We have a federal pension along with a 401K that's been maxed out for over a decade, and was well-funded before that.

But, overall, for our society taking away pensions and making people save for retirement as a replacement seems to have been a poor plan. People don't plan or save for the future. Some can't, others just don't have the desire to, many others are living paycheck to paycheck whether because of low wages or poor planning.

We should never have left pensions behind.

Some people don't know how to budget or think about saving for the future. That's a shame, but that doesn't mean that companies should be doing it for them in the form of a pension.

Why not? It used to be a non-controversial part of compensation, in return for the work they provided. The benefits were not provided out of the kindness of their hearts.

I don't understand a lot of Americans. Many think the government should help care for seniors in any meaningful way b/c . . . "socialism." Now you object to companies providing a benefit to ultimately help retirees/seniors. And for many people, they don't make enough to properly or fully save for retirement, and/or they lack the smarts to properly invest in a meaningful way. So . . . sorry to the wave of elderly coming down the pike. Enjoy your warehoused medicaid facility (which taxpayers will fund anyway) or the street.

It's despicable how people in this country view our collective moral obligation to care for all citizens, including our elderly. Sincerely despicable.

No one "objects" to pensions - we just recognize that they aren't economically feasible. People ae living longer in retirement, and the defined benefit plan of yesteryear, at the benefit and contribution levels our elders enjoyed, can't be sustained. It's just math.

[Anonymous]

Anonymous wrote:Pensions? WTH? Pensions failed. My dad worked for a non-profit company who had a pension system in place. It declared bankruptcy and screwed everyone who worked there. He was lucky that he was young enough at the time to recover. A lot of people were really hurt by it.

SS is the baseline. Use that and save additional money for yourself. You can't rely on anyone else.

Can’t really rely on SS either. They keep wanting to increase ages, might do same with Medicare as well. I don’t plan to work until I’m. 70

[Anonymous]

Anonymous wrote:

Anonymous wrote:Seems like the beginning of a new indoctrination attempt among the progressive left - subtly attacking 401ks to set up the justification for crippling them through much higher taxes down the road.

Anyway, I know the NYT well enough to do the opposite of what they tell you to do.

We should be taxing 401(k)s or at a minimum we should means test social security so that 401(k) millionaires aren't collecting social security as the system runs out of money to provide for those underprivileged people who truly need it.

sS is not a welfare program. It’s a program I paid into and therefore am entitled to collect benefits proportionate to my pay in. Doesn’t matter if I’m also a millionaire.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Seems like the beginning of a new indoctrination attempt among the progressive left - subtly attacking 401ks to set up the justification for crippling them through much higher taxes down the road.

Anyway, I know the NYT well enough to do the opposite of what they tell you to do.

We should be taxing 401(k)s or at a minimum we should means test social security so that 401(k) millionaires aren't collecting social security as the system runs out of money to provide for those underprivileged people who truly need it.

lol, so the people earning money and putting it into social security shouldn’t get their payouts, or they should be more heavily taxed so the people rewards those who didn’t save for retirement privately. The answer is always “tax them more.”

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:401k allows people to be mobile. The problem is that 401ks aren’t a great deal. They’re an ok deal but not a great one. But it’s probably the best option that is feasible politically…

smh....401ks are not a great deal? That is an ignorant comment from some one who lacks perspective. I know many people that by age 60 have $1 million+ or nearly that amount in their 401k. And some will also have a paid off house by 60. And Roth 401ks are an even better deal. The 401-k is just one of the spigots you utilize in retirement. Hopefully you have three streams of income. 401-k, SS, taxable investment accts, some people will have pensions and/or rental income. The more spigots the better.

You’re the ignorant one who lacks perspective if you think the 401k is such a great deal.

And, I already have 1M in my 401k and I’m well shy of 60.

401k is just not that great of a deal.

It’s good, but not great.

When you are in top tax brackets, it's an excellent way to minimize taxes in your 20/30/40/50s. Then it grows tax free as well. So deferring taxes until we retire is always a huge benefit.

The benefit is based on the assumption tax rates will be lower for you in retirement. I’m not sure why that is a foregone conclusion for anyone earning in high tax brackets for decades.