only a socialist would call a savings plan a "subsidy"
that's b/c you want to take freedom behind a middle school, rape it, and carve a $ on its face
People always have an option. You do not have to contribute to a 401k, you can use a traditional IRA as well. When used in conjunciton with a 401k, you can sock away ~$22,000 pre-tax. That is huge because it also lowers your tax rate in the process, giving that $22k a ~30% growth advantage over taxable funds.
This country has a HUGE debt problem, and until it is dealt with directly, it will not get better. We have a massive liability that is growing daily, but not getting fixed. Until then, I will not put my money in US govt securities. The return you get for the risk you are realistically taking (see inflation, default) are not worth it.
True, but the reality is that people are either too uninfromed or too irresponsible to manage their money properly. I'd like to say the burden is on them to educate themselves and make sacrifices, but the reality is they don't. So if we don't force them (not a very american sentiment, I know), the responsible and intelligent end up subsidizing them through social security and medicare. Heard an NPR interview a few months ago from someone who had written yet another "retirement for dummies" book and she was saying the flexibility in 401k is is actually a bad thing for most people... assuming they even use it (which not enough do) they tend to screw it up through aggressive risky investments at the wrong times in their careers, then get more desperate and more aggressive when they realize they don't have enough for retirement.
Yep there are options. My point is that most people don't know how to properly manage those options. I try but know I could do a much better job. I wish I had more options withing my 401K. Every choice I have has underperformed the market for the last 10 years.
absolutely. hence the reason i claim a ton of exemptions so that i don't have any fed tax taken out. i'd rather put mine into savings/money market so I can grow something off of it instead of loaning the gov't money i'll probably get back anyway.
Read this book: "Devil Take the Hindmost"You know, I have to say that even the US News report seems like a political hack-job as no one is "contemplating" something, they invited someone in to testify before a subcommittee. to change / get rid of 401ks would be political suicide, and mentioning it (along with the Socialism word) just seems like normal politics 2 weeks before an election.
But.
People invest in 401ks / IRAs because they're convinced that the market will continue to go up, because that's what it's always done. We've shaken our heads at people who bought houses in '06 figuring that they'd keep going up (because that's what they've always done), knowing that it grew too big, too fast and had to come down. It took years before the housing market returned in the early 90s, and that was NOTHING compared to the housing bubble that is bursting now. It could be a long, long time before housing prices get back to their high again.
But stocks? Over a long time period, the stock market has always gone up, right? The DJIA has. But the Nikkei? It hit a high of almost 39,000 on the last day of trading in 1989. It's now trading at 7,649, a drop of 80% over the last 20 years.
Yes, we're not Japan. Yes, our economy is (hopefully) stronger, and more resilient. But the cries for "privatizing Social Security" and the concept that people should be able to put their (guaranteed retirement) money in the stock market falls apart if the stock market isn't going to always go back up.
I'm sill confident that the market *will* go back up, and I'm still investing heavily in my pre-tax retirement and post-tax savings accounts. But. This is also a pretty good lesson on the fact that we need to keep guaranteed retirement proposals like SS fully funded and not rely on "the market" to provide for people's well-being after they retire...
/soapbox
