The 401K Drives Inequality: NY Times article.

[Anonymous]

It’s good to look at how other countries manage these issues. Australia introduced a system called superannuation in 1992, which requires all employers to make mandatory 11% contributions into a super fund for employees. Employees can make voluntary contributions from their income, which are taxed at a lower tax rate, up to a certain threshold. Each person can choose to move their accumulated contributions between funds.

After 32 years, the Australian superannuation ‘pot’ now exceeds $3.7 trillion and is the fourth largest in the world. It’s worth more than their entire stock market. For those with little or no super, there is an aged care pension which is means-tested based on income and assets. That is funded from general government revenue.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Social Security is going bankrupt. What's left should be reserved for those who need it -- not 401(k) millionaires. This is the way it's going to be, whether you like it or not. Who do you think has the votes -- the 401(k) millionaire set or the rest of the struggling population? Diversity, Equity and Inclusion mean anything to you or are you still living in the 1950s in your head?

DP, but why not just raise the payroll cap. It makes no sense that someone making up to 168k pays tax on that full amount but someone making $1M a year also only pays tax on the first 168k.

Everyone should contribute a percentage based on their full salary and then it will be funded with those who make the most contributing the most.

Means testing SS is just another way to harm the middle and UMC when it is the very wealthy who truly do not need it. The person making < $150k who manages to save up $1M in retirement is not a who should be taking the hit on inadequate SS funding.

I make a little bit more than this and will have managed to save more than $1 million in 401(k) and Roth accounts by the time I retire, but I would not be opposed to paying more taxes later if it means keeping Social Security viable.

I'm the PP who posted the $1 million comment. I didn't say that I wouldn't be willing to put in a little more, delaying my benefits a little, or receive a slightly reduced amount. That wasn't the discussion at the time. The discussion was nothing. We would get nothing.

I am willing to take a revised version of benefits. But, I'm not willing to take nothing.

Got it. I don't think "nothing" will ever wind up being on the table -- there's no way the politics there make any sense, even if someone thought it was a good policy. (Which I also don't.)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Social Security is going bankrupt. What's left should be reserved for those who need it -- not 401(k) millionaires. This is the way it's going to be, whether you like it or not. Who do you think has the votes -- the 401(k) millionaire set or the rest of the struggling population? Diversity, Equity and Inclusion mean anything to you or are you still living in the 1950s in your head?

DP, but why not just raise the payroll cap. It makes no sense that someone making up to 168k pays tax on that full amount but someone making $1M a year also only pays tax on the first 168k.

Everyone should contribute a percentage based on their full salary and then it will be funded with those who make the most contributing the most.

Means testing SS is just another way to harm the middle and UMC when it is the very wealthy who truly do not need it. The person making < $150k who manages to save up $1M in retirement is not a who should be taking the hit on inadequate SS funding.

I make a little bit more than this and will have managed to save more than $1 million in 401(k) and Roth accounts by the time I retire, but I would not be opposed to paying more taxes later if it means keeping Social Security viable.

+1. I make around this as well in my 30s and have been maxing out my 401k since I was 24 years old. I have been thinking about retirement and making smart financial choices since I was 24 years old. I was living on a tight budget at 24 years old to prioritize maxing out my retirement. No, my private retirement savings don’t need to be taxed further because other 24 year olds didn’t read financial blogs and didn’t save for retirement. My 401k is not a welfare account, and neither is social security.

I don't actually think you were +1-ing my comment, since I said I would NOT mind if my retirement savings were taxed more in order to keep Social Security viable. (And I have always saved into my 401k even when I worked in jobs that had no match at all, so I'm with you on what my priorities were in my 20s.)

[Anonymous]

Anonymous wrote:I am a partner at my boutique firm and 80% of my firm get's paid over the SS limit. If with a decent chunk making multiples. We absolutely would cut or at least reduce the future increases to combat an higher SS tax. My profits aren't being cut because politicians can't do their jobs.

Exactly! No way companies with higher earners would just pay the 6.2% without it coming from somewhere, and it's likely to come from everyone's salaries, not just the higher earners.

Congress needs to fix it by funding SS like they are supposed to. Not trying to cut benefits for people, as they were promised, or taxing people more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Social Security is going bankrupt. What's left should be reserved for those who need it -- not 401(k) millionaires. This is the way it's going to be, whether you like it or not. Who do you think has the votes -- the 401(k) millionaire set or the rest of the struggling population? Diversity, Equity and Inclusion mean anything to you or are you still living in the 1950s in your head?

DP, but why not just raise the payroll cap. It makes no sense that someone making up to 168k pays tax on that full amount but someone making $1M a year also only pays tax on the first 168k.

Everyone should contribute a percentage based on their full salary and then it will be funded with those who make the most contributing the most.

Means testing SS is just another way to harm the middle and UMC when it is the very wealthy who truly do not need it. The person making < $150k who manages to save up $1M in retirement is not a who should be taking the hit on inadequate SS funding.

I make a little bit more than this and will have managed to save more than $1 million in 401(k) and Roth accounts by the time I retire, but I would not be opposed to paying more taxes later if it means keeping Social Security viable.

Good for you! You are always free to pay more taxes.

However, if you will only have a million by time you retire, you most likely have not been taxed to death for the last 25-30 years. We pay over 50% in taxes (fed, state, SS, medicare) already. Don't really see the need to pay more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:They should get rid of the spousal benefit for SS. Everyone has the option to work, women are not limited by an expectation they stay home. If you don’t work, you shouldn’t get SS. This will encourage more people to work, which is what the system needs. Having to provide payment to 2 people when only one person paid in, results in a deficit to the system. The country can’t afford this.
I also agree with getting rid of the cap, not just increasing it. Tax the person that made $1 million and $2 million just as you would the one who made $150k.

Stay at home moms provide a tremendous benefit to our society. They take care of lots of societal unpaid matters that other people don't have time to deal with. Who do you think runs the girl scout troop, the PTA, the Sunday School. Who has the flexibility to take kids to doctors appointments.

People who stay home to take care of kids make our society better and provide value you obviously don't appreciate. Just because you don't see it doesn't mean it's not value.

Oh please I did all that volunteering while working full time. You don't have to SAH to run the girl scout troop or take kids to the doctor.

[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.

So you want to work for One Company your whole life, and take a chance that they have funded the pension well, invested it well, won't bankrupt it, won't act fraudulently..... as opposed to being responsible for your own life, your career choices, work for one company, do a side gig to earn more when you are young, learn about investments, the market, and be responsible and accountable for your own retirement? Mmmk.

Vast majority of Americans are not intelligent enough to save for and invest in their retirement. Even very smart people get decision paralysis when it comes to investing. I had an extremely smart boss in the federal government who was 100% invested in G fund in the TSP after 15 years in gov't. Why? Because they were (irrationally) afraid of losing money. During the big market drop in 2020, I convinced them to convert half their G funds into C funds. Best decision ever. And that's a person with an undergrad degree from an Ivy and a JD from the T5 law school.

Most Americans really just need a more robust pension system. Let the investment professionals and actuaries manage it.

There are plenty of very smart people who are risk averse. They don’t tend to get rich.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Social Security is going bankrupt. What's left should be reserved for those who need it -- not 401(k) millionaires. This is the way it's going to be, whether you like it or not. Who do you think has the votes -- the 401(k) millionaire set or the rest of the struggling population? Diversity, Equity and Inclusion mean anything to you or are you still living in the 1950s in your head?

DP, but why not just raise the payroll cap. It makes no sense that someone making up to 168k pays tax on that full amount but someone making $1M a year also only pays tax on the first 168k.

Everyone should contribute a percentage based on their full salary and then it will be funded with those who make the most contributing the most.

Means testing SS is just another way to harm the middle and UMC when it is the very wealthy who truly do not need it. The person making < $150k who manages to save up $1M in retirement is not a who should be taking the hit on inadequate SS funding.

I make a little bit more than this and will have managed to save more than $1 million in 401(k) and Roth accounts by the time I retire, but I would not be opposed to paying more taxes later if it means keeping Social Security viable.

Good for you! You are always free to pay more taxes.

However, if you will only have a million by time you retire, you most likely have not been taxed to death for the last 25-30 years. We pay over 50% in taxes (fed, state, SS, medicare) already. Don't really see the need to pay more.

I will have more than a million by the time I retire; I'm probably 20+ years from retirement and have about three-quarters of a million in retirement accounts now (also have more funds in taxable accounts that I'm not counting here). I don't pay over 50 percent in taxes, true, but I was specifically responding to a post that said people who make about what I make and retire with about $1 million don't need to pay more in taxes, not about people who make more and therefore paid more in taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:They should get rid of the spousal benefit for SS. Everyone has the option to work, women are not limited by an expectation they stay home. If you don’t work, you shouldn’t get SS. This will encourage more people to work, which is what the system needs. Having to provide payment to 2 people when only one person paid in, results in a deficit to the system. The country can’t afford this.
I also agree with getting rid of the cap, not just increasing it. Tax the person that made $1 million and $2 million just as you would the one who made $150k.

Stay at home moms provide a tremendous benefit to our society. They take care of lots of societal unpaid matters that other people don't have time to deal with. Who do you think runs the girl scout troop, the PTA, the Sunday School. Who has the flexibility to take kids to doctors appointments.

People who stay home to take care of kids make our society better and provide value you obviously don't appreciate. Just because you don't see it doesn't mean it's not value.

Oh please I did all that volunteering while working full time. You don't have to SAH to run the girl scout troop or take kids to the doctor.

Not PP: And you are the exception and not the rule.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:They should get rid of the spousal benefit for SS. Everyone has the option to work, women are not limited by an expectation they stay home. If you don’t work, you shouldn’t get SS. This will encourage more people to work, which is what the system needs. Having to provide payment to 2 people when only one person paid in, results in a deficit to the system. The country can’t afford this.
I also agree with getting rid of the cap, not just increasing it. Tax the person that made $1 million and $2 million just as you would the one who made $150k.

Stay at home moms provide a tremendous benefit to our society. They take care of lots of societal unpaid matters that other people don't have time to deal with. Who do you think runs the girl scout troop, the PTA, the Sunday School. Who has the flexibility to take kids to doctors appointments.

People who stay home to take care of kids make our society better and provide value you obviously don't appreciate. Just because you don't see it doesn't mean it's not value.

Oh please I did all that volunteering while working full time. You don't have to SAH to run the girl scout troop or take kids to the doctor.

Social security was started to prevent people from being impoverished in old age. It’s an insurance program. SAHM’s (and dads!) exist. Put two and two together before you further engage in the mommy wars.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:They should get rid of the spousal benefit for SS. Everyone has the option to work, women are not limited by an expectation they stay home. If you don’t work, you shouldn’t get SS. This will encourage more people to work, which is what the system needs. Having to provide payment to 2 people when only one person paid in, results in a deficit to the system. The country can’t afford this.
I also agree with getting rid of the cap, not just increasing it. Tax the person that made $1 million and $2 million just as you would the one who made $150k.

Stay at home moms provide a tremendous benefit to our society. They take care of lots of societal unpaid matters that other people don't have time to deal with. Who do you think runs the girl scout troop, the PTA, the Sunday School. Who has the flexibility to take kids to doctors appointments.

People who stay home to take care of kids make our society better and provide value you obviously don't appreciate. Just because you don't see it doesn't mean it's not value.

Oh please I did all that volunteering while working full time. You don't have to SAH to run the girl scout troop or take kids to the doctor.

Social security was started to prevent people from being impoverished in old age. It’s an insurance program. SAHM’s (and dads!) exist. Put two and two together before you further engage in the mommy wars.

SS for SAHMs (or dads) should be means tested. I don’t agree with means testing generally, but I do in the case of someone who otherwise did not work enough to earn social security.

[Anonymous]

Anonymous wrote:They should get rid of the spousal benefit for SS. Everyone has the option to work, women are not limited by an expectation they stay home. If you don’t work, you shouldn’t get SS. This will encourage more people to work, which is what the system needs. Having to provide payment to 2 people when only one person paid in, results in a deficit to the system. The country can’t afford this.
I also agree with getting rid of the cap, not just increasing it. Tax the person that made $1 million and $2 million just as you would the one who made $150k.

This is the right answer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:They should get rid of the spousal benefit for SS. Everyone has the option to work, women are not limited by an expectation they stay home. If you don’t work, you shouldn’t get SS. This will encourage more people to work, which is what the system needs. Having to provide payment to 2 people when only one person paid in, results in a deficit to the system. The country can’t afford this.
I also agree with getting rid of the cap, not just increasing it. Tax the person that made $1 million and $2 million just as you would the one who made $150k.

Stay at home moms provide a tremendous benefit to our society. They take care of lots of societal unpaid matters that other people don't have time to deal with. Who do you think runs the girl scout troop, the PTA, the Sunday School. Who has the flexibility to take kids to doctors appointments.

People who stay home to take care of kids make our society better and provide value you obviously don't appreciate. Just because you don't see it doesn't mean it's not value.

I worked a full-time job, volunteered at my DC school, and made it to doctor's appointments. My family had no nannies or au pairs. I don't know why you think other people should pay for your choice to stay home to take care of your DC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:They should get rid of the spousal benefit for SS. Everyone has the option to work, women are not limited by an expectation they stay home. If you don’t work, you shouldn’t get SS. This will encourage more people to work, which is what the system needs. Having to provide payment to 2 people when only one person paid in, results in a deficit to the system. The country can’t afford this.
I also agree with getting rid of the cap, not just increasing it. Tax the person that made $1 million and $2 million just as you would the one who made $150k.

Stay at home moms provide a tremendous benefit to our society. They take care of lots of societal unpaid matters that other people don't have time to deal with. Who do you think runs the girl scout troop, the PTA, the Sunday School. Who has the flexibility to take kids to doctors appointments.

People who stay home to take care of kids make our society better and provide value you obviously don't appreciate. Just because you don't see it doesn't mean it's not value.

Ummm me and my DH. Both working parents and we use PTO to take kids to doctors’ appointments, stagger work hours to manage sick kid days, he coaches little league, I’m a scout leader, we both chaperone field trips, etc.

The class moms at my kids’ school are working moms. The dad’s coaching sports are working dads. The PTA is a mix, but has plenty of working parents.

Do you really think working parents don’t do all this stuff too? I get that SAHPs do more childcare before elementary school, but this is bananas that a non-working person should collect SS because they take their kid to the dentist and run a scout troop. Like do you actually hear yourself?

[Anonymous]

Anonymous wrote:

Anonymous wrote:They should get rid of the spousal benefit for SS. Everyone has the option to work, women are not limited by an expectation they stay home. If you don’t work, you shouldn’t get SS. This will encourage more people to work, which is what the system needs. Having to provide payment to 2 people when only one person paid in, results in a deficit to the system. The country can’t afford this.
I also agree with getting rid of the cap, not just increasing it. Tax the person that made $1 million and $2 million just as you would the one who made $150k.

But we also need more children and being able to stop working and still be eligible for SS and Medicare allows more flexibility to have children.

Or hear me out … we could have better supports for working parents such as affordable childcare, expanded maternity leave, etc. instead of relying on women to forgo their careers so they can churn out kids to keep the population going.

There’s no way men are going to leave the workforce in droves for the promise of getting SS on their wife’s earnings record.