Posted on 10/08/2020 10:38:24 AM PDT by SJackson
Round about a month ago, I took a closer look at Joe Biden’s retirement-related policy proposals, or, more specifically, those of the “Unity Task Force,” which had just released its final document.
One of the items in that document and on the Biden campaign website is a promise to “equalize the network of retirement saving tax breaks” — a proposal that generally translates to eliminating the tax advantages currently enjoyed by retirement savings accounts and replacing them with a “credit” or “match.” The idea is that the tax advantages, or “tax expenditures,” as they’re called, disproportionately accrue to relatively higher earners, and the hope of a change is to provide benefits in equal measure to all income groups.
But how this translates in practice is not clear. An article at Roll Call this morning picked up on the proposal, as did Courthouse News, but neither had more detail, referencing only a 2014 Urban Institute/Tax Policy Center proposal, which provided various hypothetical alternatives.
So what did that proposal suggest? It included a variety of options, including
Reducing total available pre-tax savings (employer and employee) from (at the time) $51,000 to only the lesser of $20,000 or 20% of pay; Expanding the currently relatively-small “Saver’s Credit” (equal to 50% of the first $2,000 in retirement savings, only for relatively lower earners, up to $$19,500 for singles, $39,000 for couples; and phasing out quickly, to 20%, 10%, and ultimately nothing for singles with $32,500/couples with $65,000 in income) to stay at 50% for higher earners and phase out in a much more gradual manner instead; or Wholly removing any tax benefit for retirement savings and provide a credit of 25% instead ...snip...
(Excerpt) Read more at forbes.com ...
“ I think that might be a “red line” for a lot of people.”
Chapter 1 in How to Start a Violent Revolution...with all the people you don’t want to make violent doing the revolting.
The tax shelters can be even better than matching funds if you have the right IRA versus most corporate 401k’s.
My 7 figure retirement $ is going offshore the moment they announce such a thing.
Along with trillions (100s of trillions?) of others.
Exactly. It’s all about the time value of money, really.
Trump should hammer this daily.
“...What’s That Mean?...”
You are f - - - - -.
Gibsmedat!
Perfectly clear. Let me explain: the government gets your money and you get an IOU in return.
Simple.
The 401(k) is the ONLY way that middle class working families will be able to put enough away to have a decent retirement. Now, you will have to work longer to put away the same amount, and due to the lessened real compounding, if you are middle aged...you will NEVER grow at the rate high enough to hit your target.
Bingo. Also, the elites will have better control over where you work and how you live.
When you have significant 6 or 7 figure IRA’s, their control over you is diminished.
It means he wants to take the money of people who worked hard and saved — you know, like people from Scranton — and p*ss it straight away on one of his constituancies.
Or worse, they tax the hell out of it each year until you don’t even have IOUs.
Even if I get banged for 40% combined state and Fed taxes, it's better than old Stinkfinger Joe taking all of it for his DNC chums.
Thanks for the summary... my eyes were starting to glaze over..
Totally SUCKS!
I’ve been wondering when they would come for my 401k money?
I think that might be a “red line” for a lot of people.
You mean “working” people right? The non work crowd only wants, dey do not care a whit about savings. Same bunch that says that college should be “free” or same with health care, food, transportation etc. By free they mean at no cost to them and have no idea of how it gets paid for or care. BTW, I am not talking about the truly incapable of providing for themselves, I am talking about a sea of people who do not wish to be troubled by working.
It would not surprise me if we don’t have a portion of those who shop at super markets who believe the stuff on the shelves is grown in the back!
Biden is a evil POS!
So is Kamala.
Neither one of them ever worked a hard day in their worthless lives.
The entire party is nothing but thieves.
If you save in non-Roth retirement instruments (401Ks or IRA’s) you usually are taking pre-tax dollars so you will owe taxes on the back end. If you save in Roth IRA’s or 401K’s, you have already paid the tax on what you deposit and the deal struck in law, so as to incentivize investment in the market, is that you dont pay tax on the back end.
Taking away the tax incentive for Roth, or the pretax incentive for non-Roth, either or both, will destroy investment incentive for millions of Americans of every class and color. Its an insane idea.
As are most leftists. But even if you aren't one of those nasty high earners and don't think it would affect you, or even benefit you, consider the end result.
Capital would be reallocated from investments which INVESTORS choose (which have to earn decent returns in the long run or investors will bail out) to investments which the GOVERNMENT choose.
Think of the "investments" which the political class has chosen. Most of it rewards political cronies or worse. Have we all forgotten about Solyndra and the ratholes of the ObaMao administration so soon?
Do you know that once upon a time, the District of Columbia had a great public school system and the segregated Negro school district actually outperformed the other public school district even though they were mostly using hand-me-down text books and school supplies. Why do you suppose that was?
“A Company match of 6% or so is definitely helpful but relatively small compared to the amount one should be saving for retirement. A person should probably be saving at least 20% if you wish to have a decent standard of living in retirement. If your Company provides a higher match than 6% that is even better.
The benefit of 401Ks is not being taxed on the front end which allows the account to compound and grow tax free. Of course you pay the taxes on the backend when you withdraw it. So there is no free ride on a 401K. But it is helpful way to save money that otherwise might just get pissed away.
401K’s represent a huge amount of money the dems want to tap in some way. I don’t see them confiscating it. They don’t have to. They will just change the rules and increasingly tax the crap out of it.
It is probably wise in your retirement years to pull out as much pre-tax savings as you can stand each year. Taxes have nowhere to go but up given the out of control spending by all the politicians in DC.”
If you believe that the tax rate will be more onerous in the future, and you have the option between traditional pre-tax 401(k) and a Roth 401(k), wouldn’t it make sense to go with the Roth 401(k)? You pay today’s tax rate, and when you take it out, it’s tax free (after 59.5 yrs). While my Roth IRA has a low limit, my Roth 401(k) doesn’t have a limit, so it seems to me that I should be maxing out the Roth 401(k) and avoiding the traditional 401(k) contributions IF I think the future tax rates on income/capital gains will be higher than today.
The government has been salivating at the thought of raiding 401K’s and IRA’s for decades.
Let's see. I've got all those poles... what would look good on the ends of these?
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