The 401K Drives Inequality: NY Times article.

[Anonymous]

401(k)s are the only reason middle class Americans can retire.

Wealthy people don't care that much about their 401(k) as the amounts can be a drop in the bucket.

[Anonymous]

Why is this even published? How does this benefit anyone?

The US will never go back to the defined benefit systems.

[Anonymous]

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…

[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.

Most of those who choose not to save/can't save in the past 20 years, likely don't have jobs where they'd have had a pension anyhow. Fast food/Panera/walmart type store never offered Pensions to hourly workers.

At some point, people have to be responsible for themselves and learn to save. As a govt we cannot keep bailing out people who are [b]too stupid to help themselves[b].

We agree we need service workers at places like Panera and Walmart, right? And those jobs don't pay a lot, by their nature. So it's reasonable that it's very hard for people working there to be able to substantively save, without any employer match, and just because of general costs of living. It's not that they are "too stupid", it's that they don't have enough money.

I’m unconvinced we need as many service workers in these suburban big box strip malls as we have. I reject the entire paradigm of quick and ubiquitous Starbucks with a formulaic suburban development 5 minutes from every formulaic suburban strip mall. Our over consumption of cheap low quality goods and food creates an economy totally reliant on this consumption which means we have a ton of this unnecessary low skilled labor that is partially subsidized by taxpayer initiatives and keeps people in a cycle of being low income, low skilled.

[Anonymous]

Anonymous wrote:401(k)s are the only reason middle class Americans can retire.

Wealthy people don't care that much about their 401(k) as the amounts can be a drop in the bucket.

This.

[Anonymous]

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…

Mobility is a good thing. Also, why are they not a great deal? It allows YOU to control what your retirement will look like. Invest enough to have the retirement you want.
Puts you completely in control of your own retirement, as it should be.

[Anonymous]

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…

Mobility is a good thing. Also, why are they not a great deal? It allows YOU to control what your retirement will look like. Invest enough to have the retirement you want.
Puts you completely in control of your own retirement, as it should be.

“Completely in control” yes if you have a multi million dollar quant team, a super computer to make rapid trades, and a group of Wharton mbas making investment decisions.

[Anonymous]

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…

Mobility is a good thing. Also, why are they not a great deal? It allows YOU to control what your retirement will look like. Invest enough to have the retirement you want.
Puts you completely in control of your own retirement, as it should be.

“Completely in control” yes if you have a multi million dollar quant team, a super computer to make rapid trades, and a group of Wharton mbas making investment decisions.

Invest in SP500 and be done. It can be done without major fees and you will do as well/almost as well as day traders. Key is investing and doing it early so time is on your side. And putting $$ into the stock market, not bonds/cash equivalents when you are 30-40 only.

So yes, you are in full control. Even the worse 401k plans have sp500 equivalent.

[Anonymous]

The 401k doesn’t drive inequality. Our late stage capitalism with its crappy pay for workers, poor public benefits (like health insurance) and excessive pay for corp execs drives inequality.

That said there should be a special place in hell for all of financial firms and employers who stuck employees with high fee investment options in their 401k so the firms made money some of which they used for kickbacks to the employer and the employees were left with a crappy nest egg for retirement

[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.

No, they'll go after Roth IRAs first. And they should -- it was horrible tax policy when created. Bill Roth was a menace.

[Anonymous]

Anonymous wrote:Are you a white male?

Pensions benefit men who don’t have to step out of the workforce for childrearing.

401ks and private brokerage accounts allow for worker mobility. You’re not tied to an employer for life.

If your policy goal is to enhance worker mobility, enact single-payer health care.

[Anonymous]

Working class people have gone their entire lives on little money, so it really isn't a difference when they survive off of just social security. I'm from a small, poor town. Houses cost under 100k. Social security truly is enough in places like that. Plus a paid off house is a big benefit. Yes, they cannot travel extensively, but they also couldn't do that while working either.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Are you a white male?

Pensions benefit men who don’t have to step out of the workforce for childrearing.

401ks and private brokerage accounts allow for worker mobility. You’re not tied to an employer for life.

If your policy goal is to enhance worker mobility, enact single-payer health care.

Completely agree with this! We should have 401Ks and single payer health care. One where everyone gets the benefits of economies of scale and "discounted rates".
For ex: I can recall getting my first mammogram. Price was $800. My BCBS negotiated rate was $200. If I had no insurance, I'd have to pay $800---even if I was willing to pay in cash that day. IMO, everyone should get that $200 rate, as long as you pay that day (ie they don't have to bill you and chase you down to get paid).

[Anonymous]

Anonymous wrote:Social security is essentially a federal pension for all, the problem is that US culture doesn't support increasing contributions (in the form of taxes) in order to increase payouts, plus there are generational issues with this based on baby booms/busts.

But if you really wanted to make pensions universal, that's how you'd do it. Not by requiring or encouraging companies to provide them (as a PP noted, pensions can be very restrictive in terms of your career and you have to trust the company/government entity to actually fund it) but by making SS more robust so that people were essentially forced to save for their own retirement.

+1

Note that, as the article references, Australia's Superannuation Guarantee (the "Super") has been quite successful in that country. It is a nationalized Defined Contribution (quite a bit more comprehensive than our 401K patchwork), whereas Social Security is a nationalized Defined Benefit plan. While the "Super" may not adapt perfectly to the US, it is worth studying more.

https://en.wikipedia.org/wiki/Superannuation_in_Australia

[Anonymous]

Anonymous wrote:

Anonymous wrote:401(k)s are the only reason middle class Americans can retire.

Wealthy people don't care that much about their 401(k) as the amounts can be a drop in the bucket.

This.

Pure idiocy. Are you under the impression that a 401k is the only permissible means to save for retirement?

Anyone could have put money saved in a 401k in a taxable account.