Looks to me good proposal, removing traditional 401k and changing everything like Roth 401k This is not confirmed, but speculative or rumor.
This article is very poorly written, it’s hard to believe this article
1 Like
“With most Americans already saving an inadequate amount toward their retirement, changes to the rules would only take away a key incentive for setting money aside for the future and punish those who prudently plan for their retirement.”
And so it begins… The tax code gets twisted so it can used for the outright confiscation of assets.
Now they want to tax 401k gains 15% a year even if you don’t sell to realize the gains? Nothing like paying taxes on gains in an account where you can’t touch the money for years or decades. That would made the 401k worse than a traditional brokerage account.
We need to get a clue and go with lower rates but far fewer deductions. That is true simplification of the tax code. Congress needs to stop using the IRS tax code to pick which industries it wants to make winners and losers. They need to stop using the tax code to influence human behavior, because it isn’t working. It creates a distorted economy.
Also, if you remove the tax benefit of saving in a 401k, then even less people will save. Of course, that’s probably what they want. Get rid of people saving for retirement, so we’re all dependent on social security. Then they can justify a fat tax increase to fund a better social security. It’ll be designed to run a surplus for a few decades. That way they can spend the money on other stuff the way they did with social security. Then when it’s time to pay the money back they’ll tell us they have to raise income taxes to cover the money they borrowed from the retirement fund.
I don’t understand how or why anyone would advocate trusting the federal government with more tax revenue. No matter how noble the cause, they will screw it up. We should all be advocating for a return to the days of small federal government and minimal taxes. We’re probably too far past that point now. We’ll continue on this course until we collapse under the cost burden of our government and social programs. I used to think that’d never happen in my lifetime. Now I think it’s a near certainty in my lifetime.
3 Likes
Shouldn’t we blame ourselves? We elected the president! However, each successive president seems to push USA into worser situation. Wtf.
It would be even worse with democrats in control. Their entire platform is about income redistribution justified as “fairness”.
Congress has been covering up how bad social security and medicare are for decades. If you do the math, only 10% of people pay in enough taxes to cover their benefits. That means 90% of people get more benefits than they paid in taxes. That system is only sustainable if the work force keeps growing, so you always have more and more people paying in payroll taxes. Now that population growth has slowed and labor force participation is down, time is up for the Bernie Madoff style Ponzi scheme.
Imagine if I ran an investment fund and said, “Give me 15% of your income while you work. I’ll take that money and pay it to people that are retired. Then when you retire, I’ll take 15% from people that are working to pay you back. I’ll pay you back more money than I collected from you.” I’d be arrested for running a Ponzi scheme, but it’s exactly what the government does…
1 Like
I was going to laugh about this but I decided not to pee in my pants…Some people, not smart, keep silent, they are so dumb to not mention the name of the disgraceful guy pushing anything to destroy the future retirement of employees.
The origin of the 401K comes from the debacle of the Studebaker automobile employee’s retirement plan. It was a car that innovated anything regarding the automobile industry, curved windshields, disc brakes, seat belts, etc. But for some reasons the American public didn’t like it and the last car rolled off the line in 1966.
The united auto workers union (UAW) had worked hard at the negotiation table. They had excellent pension plans and good benefits. When the laid off workers started to collect their pensions, they found out they had not much of that money to paid them.
This pushed congress to enact ERISA, to protect employees against the manipulation of their employees. And one of the byproducts of ERISA was the famous IRA. The money to be allocated to it was $1,500, more nowadays.
In 1978, the IRS created by accident the 401(k) plan when it established a new section of the IRS code that allowed for tax deferred accumulation. It went unnoticed until a guy named Ted Benna devised a clever way to apply the new law to corporate benefits. He realized it would be good for both employers and employees. An entire industry was born, though the benefits have not been that good for the taxpayer deferring the payment of taxes to the IRS.
It is worth to comment that pensions started to disappear at that time, employers realized it was good for them to let the employees deal with uncle Sam later, and knowing most of them would retire 30+ years later to find out they were in the hole, they didn’t care. And still don’t care.
So, it was developed as a cash cow for the government, the more you earned the more taxes you would pay, which shows you the stupidity of those trying to eliminate it (if you believe 401K is a good thing) because about 30%+ of your money would be paid to uncle Sam.
By the way, starting this year, a new provision enacted by Obama would start, it would allow you the employee to not need the intervention of the middle man to create your own 401K. Yes, it was so bad I guess…
I believe no matter what type of 401K you pick, your money will be invested in the stock market and any crash will wipe out your precious retirement package, if there was one. That’s why we push for the alternative of indexed life insurance. Your money is never invested as 401K, you never lose it, and if another 2008 comes your way, you get 0% return. Your principal is saved.
Ask Jim Harbaugh how bad life insurance is
In response to a recent report that Michigan is “loaning” Jim Harbaugh $4 million this year and $2 million for each of the next five for life insurance premiums, I asked an insurance expert to estimate the proceeds of the policy, if Harbaugh were to, um, satisfy the requirements of triggering coverage during the term of the policy. The expert, who asked not to be named due to current work with college football coaches in the procurement of life insurance, estimates based on the reported information that the policy would pay out a total benefit of approximately $75 million.
1 Like
This was originally posted at WSJ, then copied to fool.com. Any way, this is speculation.
The post itself says why. Since Trump is cutting corp tax to 15%, USG will have deficit of 2.4T in 10 years. If they abolish pre-tax 401k and make it post tax 401k (Roth 401k), as a part of simplification, USG stand to gain additional 1.5T tax revenue.
Trump plan/guideline is set to release tomorrow, but ultimately Congress has to decide, draft and approve.
Why is cutting spending never an option though? It’s always raise more taxes.
2 Likes
This is our mantra, pay taxes now, so you will earn tax free money in retirement.
It is proven, IULs are cheaper than 401K and its 20+ hidden charges, plus, it gives you the chance to loan 75%-80% of your premiums from month one and they are never paid back. Plus living benefits, plus a death benefit. And your principal is never lost and no limitations.
Roth IRAs have limitations and are at the helm of many market risks and age limitations to withdraw, right?
1 Like
Well, now I am peeing my pants. almost 7 months went by and…nothing! Isn’t time for you to realize the tremendous ineptitude reigning in the white house?
By the way, somebody said it would be worse if democrats, his usual crappy attitude of not accepting the failure of this administration. Can’t debate? Deflect!
Here you go!
Proposals floating around Washington to cap the amount that Americans can contribute before taxes to 401(k) plans and individual retirement accounts are unsettling professionals in the retirement industry.
Republicans are looking for ways to generate revenue to support broad reductions in individual tax rates. One idea is to limit the amount of pretax money households can sock away for retirement saving. Such a move would likely generate significant political blowback but it hasn’t been explicitly ruled out, stirring worry among industry lobbyists.
Members of the House Ways and Means Committee are widely expected to release a version of the tax bill by mid-November. Specifics on a wide range of issues remain unclear. Emily Schillinger, a spokeswoman for the Ways and Means Committee, declined to comment. <------See how there’s nothing to be said? Why? No ideas! No brains!
Its October 20th, 2017 today. God, almost one year down (sigh)…
Do I have your permission to revive my original “Very Embarrassing Ladies” thread???
Look at the bright side, we haven’t gotten into a nuclear war yet. (Oops, emphasize the “yet”…)
1 Like
His ideas, such as Corp tax reduction and Simplifying tax code, are too good and difficult to achieve. The task Trump has assured/taken is too big and challenging everyone, Senators & House of representatives and himself, to complete. They need to find out middle ground without affecting the country or economy.
IMO, If he achieves such work in his first term, that is great !
1 Like
How much are your investments up?
It really baffles me when people who hate Trump appear mad he hasn’t achieved his agenda. You didn’t want this agenda, so shouldn’t you celebrate the senate being incompetent at passive legislation?
1 Like
Wow, gun control and pro Trump (despite all the sheet that has happened from Day 1). All the negativity and ill-will garnered worldwide after a mere what, 10 months??? The juvenile twittering, the turnstile wearing out at the Cabinet door… yeah, great job!!!
1 Like
I am going to be blunt here, excuse my French, but I doubt your state of mind if you think that guy in the white house is even learning the ropes of governing a country, none the less to learn anything when his first activity after spending the entire week humiliating, attacking, bitching about anything on tweeter is…golfing and making the emoluments clause a joke! So much for the lovers of anything constitution.
Let me tell you this: It would be a great, big, humongous honor to be a president of this nation. I can’t, I wasn’t born here. But if I did, believe me, I would be talking to people who know the deals inside Washington, I would be talking to all kinds of people, no matter their political affiliation. I would be learning anything and everything, I wouldn’t have time to be on the media tweeting like a maniac and dividing our country with racist and stupid remarks.
Don’t be selfish. I know you are in the business of making money, I help people to achieve such goal. But one thing is to make yourself rich for a while, another thing is that such action will come in detriment of our economy.
Let me explain you something you may and ought to know. 401K wasn’t created for the common people. It was a kind of parachute for the management. But it was translated to the commonality of workers and it started like a fire. That deviated responsibility from corporations ending the famous retirement=defined benefits nonexistent nowadays.
So, government survives on taxes they collect. Nobody volunteers --actually we do, but that’s another topic-- to donate any amount of their hard earned money. That is what sustains all the projects from government, even to pay the lazy people in congress. And by cutting the amount taxpayers were supposed to pay, you, as a government, are an idiot by sabotaging yourself. Who do you think is going to pay for the national debt? Not the stock market as the idiot in the white house suggested. It is and going to be, sooner or later, via taxes.
If you believe that guy is putting his eyes on what’s going on in congress, well, sorry to tell you, you are delusional. He went to play golf several times before addressing the 4 Americans being abandoned in Niger, the real Benghazi of modern times. The continuos supply of tweets tells us somebody is sick in his mind, and that’s not me posting anything at 3 AM just to insult, well, not that I don’t do it, but I am not a president, which calls for higher standards of behavior.
Did you get the point?
What’s the over/under (years served) on impeachment again???
I’m pro tax reform. The four time we’ve cut taxes GDP growth accelerated, and tax revenue increased. Even in the Kansas example where people love to blame tax cuts for their budget crisis, tax revenue increased after tax cuts. The blame always goes on lack of tax revenue, but no one looks at spending increasing faster than inflation. It’s pretty simple math to see government spending that increases faster than inflation will eventually lead to a budget crisis.
I’m against Obamacare since it does zero to lower actual costs and is just a way to shift who pays the bill.
I’m not pro-Trump, but I am anyone but Hillary. I also don’t buy the leftist agenda which manipulates the public with headlines and emotions. I’ve posted a bunch of times leftist positions where a majority of pubic opinion is wrong based on actual data. Gun control is a perfect example. Most people think homicide rate and violent crime rates are up. They are actually down. People think the rich are paying a smaller share of taxes than they did in the 1980’s. The rich are actually paying a larger share despite marginal tax rates being lower. We blame the white man for minority poverty rates when the biggest driver is out-of-wedlock births went from less than 10% to over 70%.
I guess it’s appealing to people to react emotionally to a headline that provides a villain to blame and hate. Then people vote for the person that promises to take care of the villain.
Wait, so are you telling me that in the last election, you did not weigh or do a pro/con of each candidate before making your fateful vote? Keep in mind, I came out (not out of the closet) and told everyone here that I voted for Hillary despite being a registered GOPer. I lean pretty moderate and only side with GOP because I am somewhat business minded and fiscally conservative, but that is primarily it though. At the end of the day, like many elections past, I simply had to make a call. A call on who is the LESSER of the two evils, if you will. Assuming you did that same type of analysis, why didn’t you also come to the conclusion that Hillary simply has the more relevant experience for the job? Come on, if this were for a job posting at your company and you are the hiring manager with only these two resumes to choose from, would you have gone with The Donald (no experience at all) vs Hillary (some blemishes but experienced)??? Why should it be any different???
You know, they were both evil. And you could slice the cake a variety of ways to decide which one was the lesser of the two evils. But different slices would give you different answers.
For some people the fact that she had more relevant experience was not necessarily a good thing. Just meant she’d be better at shoving her agenda down people’s throats and making successful backroom deals to get what she wanted.
2 Likes
Do nothing politician is actually a blessing many times. A politician who does too much meddling could be a disaster to the people. Hitler, Stalin, Mao have all achieved dramatic social changes and the result is missions of deaths.
Be careful of what you wish.
We need skilled administrator, not radical revolutionists. Our president should be a manager, not forcing changes to the people. Our government should be small and effective, doing the clerical jobs, not imposing ridiculous restrictions and make the people their prisoners
1 Like