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Republicans aiming to cap 401k contributions


luvyablue256

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But I thought Republicans were against this kinda stuff! :4_joy:

 

https://mobile.nytimes.com/2017/10/20/us/politics/republicans-tax-401-k.html?mwrsm=Facebook&referer=android-app://m.facebook.com

 

WASHINGTON — House Republicans are considering a plan to sharply reduce the amount of income American workers can save in tax-deferred retirement accounts as part of a broad effort to rewrite the tax code, according to lobbyists, tax consultants and congressional Democrats.

It is unclear if Republicans will ultimately include a cap on contributions in the tax bill that they are expected to release in the coming weeks. Such a move would almost certainly prompt a vocal backlash from middle-class workers who save heavily in such retirement accounts and from the asset management industry.

The proposals under discussion would potentially cap the annual amount workers can set aside to as low as $2,400 for 401(k) accounts, several lobbyists and consultants said on Friday. Workers may currently put up to $18,000 a year in 401(k) accounts without paying taxes upfront on that money; that figure rises to $24,000 for workers over 50. When workers retire and begin to draw income from those accounts, they pay taxes on the benefits.

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14 minutes ago, Justafan said:

It's just fucking stupid in every way.  No one wins.  

 

In fact, they should transition SS into a massive 401k program instead.  Talk about building the wealth of the nation.  

They should absolutely not do that...

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10 minutes ago, Justafan said:

And why is that?

Because it is highly insecure, driven by the whims of the stock market. And if you lose your investment, as investors sometimes do, then what? You should just die? The government has to pay you anyway? The monthly returns would fluctuate, even in the normal times, leaving you with no sense of what to expect.

 

Now, if your goal is to give a windfall to investment managers because you have forced every working stiff in the country to pay them to manage their new account then there's a win! Or if you just want to make the rich even richer by driving up the stock market with trillions in new forced investment capital, then big win for the rich!

 

If the goal is to make sure that future retirees have a safe, reliable monthly income to live off of then social security is what you want.

 

imagine retiring to live your life off “stock market security” back in 2007. Then the bottom drops out and your dividends go away. Where is your money coming from then?

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9 minutes ago, Starkiller said:

Because it is highly insecure, driven by the whims of the stock market. And if you lose your investment, as investors sometimes do, then what? You should just die? The government has to pay you anyway? The monthly returns would fluctuate, even in the normal times, leaving you with no sense of what to expect.

 

Now, if your goal is to give a windfall to investment managers because you have forced every working stiff in the country to pay them to manage their new account then there's a win! Or if you just want to make the rich even richer by driving up the stock market with trillions in new forced investment capital, then big win for the rich!

 

If the goal is to make sure that future retirees have a safe, reliable monthly income to live off of then social security is what you want.

 

imagine retiring to live your life off “stock market security” back in 2007. Then the bottom drops out and your dividends go away. Where is your money coming from then?

Over long periods, the stock market doesn't drop.  There will be times when you lose money.  There will also be times when you make money.  A lot of money.  History has proven you will make far more money than you will lose.  

 

Hell, let people choose.  If people want to pay into an SS system so they have a set income, go for it.  I have a feeling many people will opt out if given the choice and they SHOULD be given that choice.  

 

If I were to need to retire in 2007, then I would leave the vast majority of my capital in right where they are and in 2009 when everything goes back up laugh at all those who panicked.  Then by 2017 when we've made like 40% more I'll have made so much money, I really won't care about the 2-year gap when the stock market didn't go up.  

 

 

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31 minutes ago, Starkiller said:

Because it is highly insecure, driven by the whims of the stock market. And if you lose your investment, as investors sometimes do, then what? You should just die? The government has to pay you anyway? The monthly returns would fluctuate, even in the normal times, leaving you with no sense of what to expect.

 

Now, if your goal is to give a windfall to investment managers because you have forced every working stiff in the country to pay them to manage their new account then there's a win! Or if you just want to make the rich even richer by driving up the stock market with trillions in new forced investment capital, then big win for the rich!

 

If the goal is to make sure that future retirees have a safe, reliable monthly income to live off of then social security is what you want.

 

imagine retiring to live your life off “stock market security” back in 2007. Then the bottom drops out and your dividends go away. Where is your money coming from then?

By the way.  Don't take my word for it.  Here is a study from 2003 talking about the difference between a private retirement account and ss.

 

Less than 5% earned a higher rate from SS.  

 

https://research.stlouisfed.org/publications/review/2005/03/01/social-security-versus-private-retirement-accounts-a-historical-analysis/

 

This is one of many types of studies that suggest that this sort of change would be incredibly beneficial to everyone.  

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35 minutes ago, Justafan said:

Over long periods, the stock market doesn't drop.  There will be times when you lose money.  There will also be times when you make money.  A lot of money.  History has proven you will make far more money than you will lose.  

 

Hell, let people choose.  If people want to pay into an SS system so they have a set income, go for it.  I have a feeling many people will opt out if given the choice and they SHOULD be given that choice.  

 

If I were to need to retire in 2007, then I would leave the vast majority of my capital in right where they are and in 2009 when everything goes back up laugh at all those who panicked.  Then by 2017 when we've made like 40% more I'll have made so much money, I really won't care about the 2-year gap when the stock market didn't go up.  

 

 

People already can choose to invest in the stock market. That’s their right.

 

But that doesn’t change the fact that social security and investing in the stock market are inherently different things. You aren’t investing money into an account for yourself. You are paying for current retirees who paid into the system themselves years ago. There is no return on investment because it isn’t an investment. 

 

If tomorrow we we decided to do away with social security and put it all into the stock market, who is paying for current retirees? Or are you ok paying double, both for them and for yourself so future workers aren’t paying for you? Because someone has to pay for retirees who now no longer have anyone funding social security...

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Also, all this ignores the obvious fact that tens of millions of people with all this retirement money will find a way to blow it and be left penniless. Because it happens all the time with people who are utterly incapable of managing money. The last thing we need is for it to happen to people's retirement funds, too...

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