New 401K upgrade coming from Washington

Discussion in 'Business, Investing & Finance' started by divits, Apr 3, 2019.

  1. divits

    divits A Muffin of the Studly Variety
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    House committee passes bill to upgrade 401(k) plans amid 'retirement income crisis'

    The bill includes:

    • A host of provisions aimed at encouraging small businesses to provide private retirement benefits to their workers.
    • It allows them to band together to offer 401(k)s and creates a new tax credit of up to $500 for companies that set up plans with automatic enrollment.
    • Businesses with long-term, part-time workers must also allow them to become eligible for retirement benefits.
    Several measures that would affect other types of savings are included in the bill.

    • It repeals the maximum age for IRA contributions and raises the age for required mandatory distributions from 70½ to 72.
    • It also expands the use of 529 plans, from only college-related expenses to include private schools, home schools and student loans.
    "Americans currently face a retirement income crisis, with too many people in danger of not having enough in retirement to maintain their standard of living and avoid sliding into poverty," committee Chairman Richard Neal, D-Mass., said Tuesday.
     
  2. bradgator2

    bradgator2 Rioting
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    Sadly, people still wont save.
     
    • FireFoley

      FireFoley Senior Member
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      Here it comes, something I mentioned a few weeks ago. The beginning of the government takeover of 401K's to be farmed out to certain financial firms so they can create government annuities for all. So who is that actually an "upgrade' for? I will tell you. The government and the insurance and the ETF/mutual fund's of the world. " Here! We will manage your money b/c we know what is best for you." This will not end well. If it's my money I say keep your filthy paws off.
       
      • ChiefGator

        ChiefGator A Chief and a Gator, Master of the Ignore list!!!!
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        Unless they raise the amounts it won't make much difference. Folks who don't make much can't afford to put money in, folks who are middle class after their children are gone could put much more into these things, perhaps double for a number of years making a real difference.

        I don't know why you should ever have to take money out, other than greed by the government. If it is inherited then it should be taxable over some period of time as they take the money out.
         
      • 78

        78 Dazed and Confused
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        Love ya, FF, but you come off here sounding like a survivalist. Relax.
         
      • Politigator

        Politigator L-boy's Cousin
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        That all sounds great but who is going to pay for these proposals?
         
      • Gator By Marriage

        Gator By Marriage A convert to Gatorism
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        Who always pays for government programs? People like us.
         
      • Detroitgator

        Detroitgator Well-Known Member
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        Ahhhh, welcome! Welcome to my world, and why I fired my previous accountant... and would never hire lboy.
         
      • Bushmaster

        Bushmaster Well-Known Member
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        Nonsensical question really. This is a gimmick to goad employers into offering a retirement vehicle. The cost of these things are so small its criminal not to have one. I put in a SIMPLE plan years ago and contribute the max of 3%. Everyone here puts in at least 3%. 3% is nothing, they should be doing at least the max on their part.

        Want to increase retirement participation? Tax it at 50% when you pull it out.
         
      • Politigator

        Politigator L-boy's Cousin
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        No it isn't nonsensical. It is a question these days that is never asked. Somebody always has these wonderful ideas how to incentivise somebody to do something by giving them tax breaks. The idea may have merit, but it is still less revenue.

        Your answer has become the standard answer now. Basically the problem (deficits) is so big that any proposal to increase it is comparatively small. We are 300 lbs and just finished a 2500 calorie dinner at a buffet. What difference is another run at the desert bar really going to make?
         
      • Politigator

        Politigator L-boy's Cousin
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        pushing out RMDS is great for people like me, who have substantial tax deferred savings. But it really does nothing to increase retirement plan savings, especially for those middle income and lower you are targeting.

        529s are also a vehicle that tends to benefit higher income people.
         
      • Detroitgator

        Detroitgator Well-Known Member
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        And yet, for at least 8 years, you argued this very point as a NON problem as it was "in line with..."
         
        • Concrete Helmet

          Concrete Helmet Hook, Line, and Sinker
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          I agree. I understand limiting the Traditional IRA's as they are a tax write off but I do not understand limiting Roth contributions especially to those over the age of 45-50 since they are at a point of diminishing debt(hopefully) and highest point of wage earnings(hopefully)….I know some will say they should invest directly in the market but some like myself just don't want to play in the stock market and don't trust other people with my money....Conversely in this era of historically low interest rates it hurts that bonds and CD'S follow that trend...Years ago a conservative "investor" or regular Joe could get 7-8% bonds and CD rates over 5%.....
           
          #13 Concrete Helmet, Apr 4, 2019
          Last edited: Apr 4, 2019
          • CGgater

            CGgater Gainesville Native
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            I’m sorry, would you explain in layman’s terms how a that works?
             
          • Bushmaster

            Bushmaster Well-Known Member
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            You truly are an idiot. You posed the question of who is going to pay for it. The topic of this thread is "new 401ks". You pose the question who is going to pay for it. The answer is the same people who are paying for it now, the employers.

            50% tax on retirement plans is a hell of a lot cheaper than social security. You and your ilk think that when people keep the money they earn, the government somehow gave them a break. Your line of thinking is retarded. When I write a check from my earnings, i am contributing to the Treasury.

            We aren't cutting spending our way out of this problem. We have to slow spending to a snail's pace and try to grow the economy enough to cover the checks. You claim to be a CPA. Take 8 hours of your 40 and go to a governmental class and listen to what I have been hearing for the last 10 years. There isn't enough discretionary to cut. Cut it all and it won't amount to ****.
             
          • Bushmaster

            Bushmaster Well-Known Member
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            When you pull money out of your IRA/401k/403b/457 etc., you include 100% of the amount that is taxable on your tax return as taxable income. I am saying reduce the amount that is taxable by 50% as an incentive to put back.
             
            • CGgater

              CGgater Gainesville Native
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              That makes more sense. I honestly thought 50% was a typo because you were talking tax rate, not taxable percentage. Or that maybe you were drunk typing. I guess I was drunk reading... at work...
               
              • Bushmaster

                Bushmaster Well-Known Member
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                I went back and read it. I could have been a lot clearer on what I typed.
                 
              • CGgater

                CGgater Gainesville Native
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                It’s all good. Thanks for clarifying.
                 
              • Politigator

                Politigator L-boy's Cousin
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                I'm talking about paying for the decrease in tax revenues. An increase in the use of tax deferral accounts decreases tax revenue, or defers it many years out.




                So you now want to reduce taxable income at retirement by half? Exempt 100% of income when earned, and then tax only 50% at withdrawal? Once again, decrease tax revenue.

                This has nothing to do with social security. I havent heard any proposals to decrease social security at the same time.

                Plus you are mostly wrong in terms of participation. There are many who don't participate even when they get an employer match. Why save tax deferred or even free for retirement when I can have a $50k Ford F-10000050 right now?

                Tax deferred accounts and Roths largely benefit upper middle class and people who would save anyway. Don't get me wrong, I'm personally a fan and I utilize them to the fullest and have material amounts and almost all of our savings in both.

                Where did this come from? I have been saying pretty much the same thing. I am not one of the idiots saying we can fix this by "cutting waste".

                At this point, not even growing spending a sub inflation levels will fix it. You have to address entitlements and at least bring taxes back to historical norms.
                 

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