Should 401ks be phased out?

[Anonymous]

Ymillions of Americans don’t take advantage of tax-favored retirement savings − or can't. Nearly half of workers have no access to a retirement plan at work, according to one AARP analysis.

[Anonymous]

Anonymous wrote:Ymillions of Americans don’t take advantage of tax-favored retirement savings − or can't. Nearly half of workers have no access to a retirement plan at work, according to one AARP analysis.

Ok? We don’t drag everyone else down because someone else’s employer doesn’t offer a 401k. That’s why IRAs were instituted. Or you could pass legislation requiring all employers to provide 401k access, the same as health insurance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ymillions of Americans don’t take advantage of tax-favored retirement savings − or can't. Nearly half of workers have no access to a retirement plan at work, according to one AARP analysis.

Ok? We don’t drag everyone else down because someone else’s employer doesn’t offer a 401k. That’s why IRAs were instituted. Or you could pass legislation requiring all employers to provide 401k access, the same as health insurance.

Crappy companies many employees can’t afford to contribute or they offer them but no match. Or the scam in high turnover retail give a match but do vesting period which 95 percent of retail store employees never get.

Also the match is worth more the more you make. A high earner in San Fran or NYC is in 40 percent tax bracket

The low income retail worker in Florida is in zero percent tax bracket.

Why does the high earner get a 40 percent tax saving on their contribution but low income a zero tax saving?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ymillions of Americans don’t take advantage of tax-favored retirement savings − or can't. Nearly half of workers have no access to a retirement plan at work, according to one AARP analysis.

Ok? We don’t drag everyone else down because someone else’s employer doesn’t offer a 401k. That’s why IRAs were instituted. Or you could pass legislation requiring all employers to provide 401k access, the same as health insurance.

Crappy companies many employees can’t afford to contribute or they offer them but no match. Or the scam in high turnover retail give a match but do vesting period which 95 percent of retail store employees never get.

Also the match is worth more the more you make. A high earner in San Fran or NYC is in 40 percent tax bracket

The low income retail worker in Florida is in zero percent tax bracket.

Why does the high earner get a 40 percent tax saving on their contribution but low income a zero tax saving?

Because we don’t want EVERYONE in the US relying on government handouts when they age.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ymillions of Americans don’t take advantage of tax-favored retirement savings − or can't. Nearly half of workers have no access to a retirement plan at work, according to one AARP analysis.

Ok? We don’t drag everyone else down because someone else’s employer doesn’t offer a 401k. That’s why IRAs were instituted. Or you could pass legislation requiring all employers to provide 401k access, the same as health insurance.

Crappy companies many employees can’t afford to contribute or they offer them but no match. Or the scam in high turnover retail give a match but do vesting period which 95 percent of retail store employees never get.

Also the match is worth more the more you make. A high earner in San Fran or NYC is in 40 percent tax bracket

The low income retail worker in Florida is in zero percent tax bracket.

Why does the high earner get a 40 percent tax saving on their contribution but low income a zero tax saving?

Because they actually pay taxes and fund the programs to help the person in florida who pays zero income tax.

I'll gladly pay 0% income tax and get rid of 401ks

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ymillions of Americans don’t take advantage of tax-favored retirement savings − or can't. Nearly half of workers have no access to a retirement plan at work, according to one AARP analysis.

Ok? We don’t drag everyone else down because someone else’s employer doesn’t offer a 401k. That’s why IRAs were instituted. Or you could pass legislation requiring all employers to provide 401k access, the same as health insurance.

That would make much more sense

[Anonymous]

44 percent of employees have no access to a 401k.

And IRAs have lower contribution limits and no
match.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ymillions of Americans don’t take advantage of tax-favored retirement savings − or can't. Nearly half of workers have no access to a retirement plan at work, according to one AARP analysis.

Ok? We don’t drag everyone else down because someone else’s employer doesn’t offer a 401k. That’s why IRAs were instituted. Or you could pass legislation requiring all employers to provide 401k access, the same as health insurance.

Crappy companies many employees can’t afford to contribute or they offer them but no match. Or the scam in high turnover retail give a match but do vesting period which 95 percent of retail store employees never get.

Also the match is worth more the more you make. A high earner in San Fran or NYC is in 40 percent tax bracket

The low income retail worker in Florida is in zero percent tax bracket.

Why does the high earner get a 40 percent tax saving on their contribution but low income a zero tax saving?

how is it a scam in "high turnover retail" for the match? Every company I have worked for has a 4 year vesting period for the match. You get 25% the first year, 50% the 2nd year until if you stay 4 years all of your match is vested now and for future.
It's not the employers fault you won't stay for 4 years.

But a smart employee would still find a way to save some in a 401k, after maxing their Roth first in this situation.
Fact is, 20/30 somethings need to be smart and make saving for retirement a key part of their budget.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ymillions of Americans don’t take advantage of tax-favored retirement savings − or can't. Nearly half of workers have no access to a retirement plan at work, according to one AARP analysis.

Ok? We don’t drag everyone else down because someone else’s employer doesn’t offer a 401k. That’s why IRAs were instituted. Or you could pass legislation requiring all employers to provide 401k access, the same as health insurance.

Crappy companies many employees can’t afford to contribute or they offer them but no match. Or the scam in high turnover retail give a match but do vesting period which 95 percent of retail store employees never get.

Also the match is worth more the more you make. A high earner in San Fran or NYC is in 40 percent tax bracket

The low income retail worker in Florida is in zero percent tax bracket.

Why does the high earner get a 40 percent tax saving on their contribution but low income a zero tax saving?

Because as a high income employee, everything my spouse and I make over $701K is taxed federally at 37%. We already pay high taxes on vast majority of our income. The small ability to save $23K (and up to $30K once "we are old enough") and let it grow tax free is literally our ONLY tax break. If we earn $2M, we pay $481K on that extra $1.3M just to the FEDERAL Government. We also pay 1.45% medicare tax on ALL our W2 income, there is no cutoff---that's another $29K on the $2M.

For a lower income worker, the Roth IRA for the max is the best route for the first $7K (or whatever the max is for 2024). Then the 401K up to the match (if any). And as you stated, they already barely pay any taxes, if any at all.

Hint: the answer is the low income person is hardly paying any taxes at all! Yet they still get to use all the Communal benefits in life, like roads, 911, fire protection, bridges, schools, etc. In fact if they have kids, they likely get free preschool for them as well.

So as you can see, the vast majority of rich people are W2 earners and simply pay what's owed in taxes, which is a lot, as there are no real ways to avoid it. So we pay for services and infrastructure that the low income worker gets to basically use for free (since they are not paying anything or much in taxes). So no, I don't begrudge letting everyone utilize the 401k tax free savings. It encourages everyone to save, even the Lower/middle income people not paying 40% taxes.

[Anonymous]

Anonymous wrote:44 percent of employees have no access to a 401k.

And IRAs have lower contribution limits and no
match.

You can choose to work a job that has a 401K with a match if it matters to you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:44 percent of employees have no access to a 401k.

And IRAs have lower contribution limits and no
match.

You can choose to work a job that has a 401K with a match if it matters to you.

+1 Even Mcdonalds offers a 401k and a 6% match to their employees. There are plenty of options for people who want to save for retirement.

[Anonymous]

Anonymous wrote:NYC top tax rate is 14.7 perfect. A dual income NYC couple is putting 60k into 401k. NYC losing out on $8,800 a year on taxes. But wait all those dividends and bond interest in 401k NYC should also be taxing.

Then that rich couple moves to Florida prior to RMDs and completely avoids any NYC tax

That same couple, their nanny, maid etc they would laugh in their face if they asked for a 401k.

Boo hoo.

Life ain't fair..


Yes, let's all enact more govt confiscation of individuals' wealth. We can all be equal once we are all equally sh!tty living our garbage lives in the toilet.

Guess what, you know what's great about not living in North Korea? The nanny in your story has the power to choose to no longer do herine of work or work for her family if she hates it so much.

Isn't at will employment wonderful? If you feel like you're underpaid, then go out and find someone who'll pay you want you think you're worth. Or start your own business to pay yourself.

So much entitlement mentality these days. America is now breeding losers at a much faster rate than creators and innovators. All of the locusts will try to devour your slice of the pie they feel entitled to because they were too lazy to get skills, an education, and chose not to save. This country is doomed and Americans are now losers.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yeah, let’s just impose communism at this point.


You don’t even need 401k. Setup your own IRA.

Maybe states shouldn’t tax the crap out of people so much and they wouldn’t move in retirement? Get your taxes under control, dimwits.

States don't "tax the crap out of people." Get a grip.

America is a low-tax jurisdiction in the world. We're a bloody tax haven, in fact.

Tell people in IL, NJ, CA, or NY their state isn’t taxing the crap out of them. Clearly you’ve never lived in a state like NJ imposing $10k property taxes for a modest $450k home.

I’d sock as much money away as possible in a 401k to avoid stupid state taxes in dumb states like IL/CA/NJ for 30+ and then move to the lowest tax state possible to avoid decades or of paying for dumb democrat/progressive ideas.

The liberal bastion of Texas has the 6th highest property tax rate in the US. Keep that in mind while you rant about stupid and dumb states.

No income tax tho, dimwit.

Hey dimwit, high property taxes can easily make up for low state income taxes. Try holding up a mirror.

Goddamn you're so stupid..

I can CHOOSE which kind of property I live in, dimwit. TX property tax might be high, but I'll just buy a smaller place in retiment to limit the tax hit. I cannot control how much income tax I gotta pay though on RMDs. Avoid income tax states altogether. It's much easier controlling tax liabilities that are consumption based, which you seem too dense to understand.

[Anonymous]

Has no one of this thread read secure 2.0? It expands access to 401ks, including requirements to make them more widespread for MC or working class folks. Yes, DB pensions are better but the accounting rule changes for a few decades ago plus 2001 and 2008 stock market changes basically put a fork in that. Unless you have a union with the power to insist on it, DBs are basically impossible.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ymillions of Americans don’t take advantage of tax-favored retirement savings − or can't. Nearly half of workers have no access to a retirement plan at work, according to one AARP analysis.

Ok? We don’t drag everyone else down because someone else’s employer doesn’t offer a 401k. That’s why IRAs were instituted. Or you could pass legislation requiring all employers to provide 401k access, the same as health insurance.

Crappy companies many employees can’t afford to contribute or they offer them but no match. Or the scam in high turnover retail give a match but do vesting period which 95 percent of retail store employees never get.

Also the match is worth more the more you make. A high earner in San Fran or NYC is in 40 percent tax bracket

The low income retail worker in Florida is in zero percent tax bracket.

Why does the high earner get a 40 percent tax saving on their contribution but low income a zero tax saving?

Because it's not a tax "cut," it's a tax deferral. The 40% tax bracket worker will eventually pay income taxes on the amount invested, plus any appreciation when they retire. It may result in a savings, if you're in a lower tax bracket when you're forced to take RMDs (many people aren't). If you're paying zero tax already, there are no taxes to defer. The employee can take their money, invest it, and when they retire, they'll only owe capital gains (not income tax) on the appreciation. That's a better deal than the 401(k) for them.

Not to mention, people in "zero" tax brackets are generally eligible for several different refundable tax credits, on top of not paying tax in the first place.

https://www.irs.gov/credits-deductions/individuals/refundable-tax-credits#:~:text=A%20refundable%20tax%20credit%20is,only%20until%20it%20reaches%20%240.