Biden's 401k changes

[Patriotsfatboy1 1,432]

President Biden’s Proposed Changes to 401(k) Plans | 401ks | US News

Higher earners will get less of a benefit. Deduction goes away and people get a tax credit. Will offer 401k's to people who do not have access.

What say you all on the plan?

[Hardcore troubadour 12,631]

Is this his way of saying he “raised” taxes on those making more than 400k, like he promised? I sense word games are afoot. 

[Alias Detective 1,179]

Im ok with it.  

[nobody 2,037]

Already raising taxes.  Great.

Also I don't get the "automatic 401k."  Don't we have IRAs for people that won't to contribute to their retirement but don't have retirement plans through work?

[TBayXXXVII 2,116]

2 minutes ago, nobody said:

Already raising taxes.  Great.

Also I don't get the "automatic 401k."  Don't we have IRAs for people that won't to contribute to their retirement but don't have retirement plans through work?

To me, the biggest thing about the 401 is the employer match.  Who's matching for those people whose employer doesn't offer it... the government - taxes?  Or is it just word play to make people think this something new?

[Alias Detective 1,179]

1 minute ago, nobody said:

Already raising taxes.  Great.

Also I don't get the "automatic 401k."  Don't we have IRAs for people that won't to contribute to their retirement but don't have retirement plans through work?

Her is why - "(Biden's proposal) would create an automatic 401(k), which may be private-based or government-based.

[Patriotsfatboy1 1,432]

3 minutes ago, Hardcore troubadour said:

Is this his way of saying he “raised” taxes on those making more than 400k, like he promised? I sense word games are afoot. 

Oh, no. That is also coming.

This just basically levels the amount that is given as a credit as 26% which is less of a benefit of those in higher brackets. 

[nobody 2,037]

Just now, TBayXXXVII said:

To me, the biggest thing about the 401 is the employer match.  Who's matching for those people who's work doesn't offer it... the government - taxes?  Or is it just word play to make people think this something new?

Oh, it didn't even cross my mind it would come with a match.  Fūck that.

[cmh6476 751]

I'm not diving in deep enough to fully understand what is being proposed here.  But I can tell you from the perspective of working for a social service, hunger-relief organization we serve way too many elderly and people who have worked their entire lives.  The misconception is that people are lazy and should be working and could better help themselves, but the reality is that the majority of who we serve did work most of their life and just didn't save enough, or had a life event that eliminated their savings causing them to rely on public assistance and support from non-profits.

I have long advocated for changes to encourage more saving while working.  We only offer a SIMPLE IRA and 100% match up to 3% of salary of employee contributions, but there needs to be more incentive for more people to save more.  I need to personally save more.  Some people here don't even contribute the 3% to take advantage of money the company is offering them.  Something needs to change.

[edjr 5,563]

My company after 20 years of not matching any 401k, just announced on Jan 11, they will be match $6000 a year. That is yooge.  also added 1 week to everyone's vacation from 4 to 5 (including sick time) 6 after 5 years and 6 weeks after 10

[Patriotsfatboy1 1,432]

Just now, TBayXXXVII said:

To me, the biggest thing about the 401 is the employer match.  Who's matching for those people whose employer doesn't offer it... the government - taxes?  Or is it just word play to make people think this something new?

An employer match is not a requirement for a 401k. Some companies do not match at all and some do it when they want to. 

 

4 minutes ago, nobody said:

Already raising taxes.  Great.

Also I don't get the "automatic 401k."  Don't we have IRAs for people that won't to contribute to their retirement but don't have retirement plans through work?

IRA's have much lower maximum contributions. 

[nobody 2,037]

1 minute ago, cmh6476 said:

I'm not diving in deep enough to fully understand what is being proposed here.  But I can tell you from the perspective of working for a social service, hunger-relief organization we serve way too many elderly and people who have worked their entire lives.  The misconception is that people are lazy and should be working and could better help themselves, but the reality is that the majority of who we serve did work most of their life and just didn't save enough, or had a life event that eliminated their savings causing them to rely on public assistance and support from non-profits.

I have long advocated for changes to encourage more saving while working.  We only offer a SIMPLE IRA and 100% match up to 3% of salary of employee contributions, but there needs to be more incentive for more people to save more.  I need to personally save more.  Some people here don't even contribute the 3% to take advantage of money the company is offering them.  Something needs to change.

You can't legislate dumb out of people.  

[Bert 1,091]

4 minutes ago, Patriotsfatboy1 said:

Oh, no. That is also coming.

This just basically levels the amount that is given as a credit as 26% which is less of a benefit of those in higher brackets. 

It is a tax increase.  He wants a progressive tax and a regressive deduction. 

Their cute little example fails to mention that the person getting the 3500 benefit is also paying almost 3 times the amount of tax as the person getting a 1200 benefit. 

[nobody 2,037]

Just now, Patriotsfatboy1 said:

 

IRA's have much lower maximum contributions. 

Then raise the max.  Seems pretty simple.

[Gladiators 1,904]

More complication and I think it's unnecessary.

[Alias Detective 1,179]

5 minutes ago, cmh6476 said:

I'm not diving in deep enough to fully understand what is being proposed here.  But I can tell you from the perspective of working for a social service, hunger-relief organization we serve way too many elderly and people who have worked their entire lives.  The misconception is that people are lazy and should be working and could better help themselves, but the reality is that the majority of who we serve did work most of their life and just didn't save enough, or had a life event that eliminated their savings causing them to rely on public assistance and support from non-profits.

I have long advocated for changes to encourage more saving while working.  We only offer a SIMPLE IRA and 100% match up to 3% of salary of employee contributions, but there needs to be more incentive for more people to save more.  I need to personally save more.  Some people here don't even contribute the 3% to take advantage of money the company is offering them.  Something needs to change.

Needs more incentive?  Christ you work with struggling people day in and day out and you need more incentive?

I'm appalled, it sounds like you want free money for you and your peeps.  That’s the incentive you want?

[Patriotsfatboy1 1,432]

2 minutes ago, cmh6476 said:

I'm not diving in deep enough to fully understand what is being proposed here.  But I can tell you from the perspective of working for a social service, hunger-relief organization we serve way too many elderly and people who have worked their entire lives.  The misconception is that people are lazy and should be working and could better help themselves, but the reality is that the majority of who we serve did work most of their life and just didn't save enough, or had a life event that eliminated their savings causing them to rely on public assistance and support from non-profits.

I have long advocated for changes to encourage more saving while working.  We only offer a SIMPLE IRA and 100% match up to 3% of salary of employee contributions, but there needs to be more incentive for more people to save more.  I need to personally save more.  Some people here don't even contribute the 3% to take advantage of money the company is offering them.  Something needs to change.

Just look at how many people struggled in the pandemic because they live paycheck to paycheck. Those people have no retirement savings. 

I see it all the time in that we have friends who save little for retirement, nothing for kid's college funds, but they have no problem spending like fiends. People do need to change and there needs to be some better incentives out there. 

[TimmySmith 2,782]

He knows lower earners don't have any money to invest, so really this is a tax on the big investors.  Say goodbye to the stock market flying along. 

[Patriotsfatboy1 1,432]

3 minutes ago, Bert said:

It is a tax increase.  He wants a progressive tax and a regressive deduction. 

It will be an increase for me. I like the way that it is now, but I understand the rationale for the proposed change. 

[TBayXXXVII 2,116]

Just now, Patriotsfatboy1 said:

An employer match is not a requirement for a 401k. Some companies do not match at all and some do it when they want to. 

 

True, but most do and the bulk always had until the economy took a dump.  My company used to match 3% for 3%.  Then from 2010-2017, they matched 1.5% for 3%.  Since then, they'll do 3% for 6%.  But again, that was the biggest benefit to the 401k.  If there is no match, there's really not much of an incentive to go with a 401 because you likely could do better by yourself.

[cmh6476 751]

Just now, Alias Detective said:

Needs more incentive?  Christ you work with people day in and day out and you need more incentive?

im appalled.

I probably didn't state my position well enough.  There really isn't much incentive for employers to encourage employees to save more.  Pensions appear to soon be a thing of the past.  If we could get people to save and plan better for life after work, there would be less burden on society to take care of these folks later in life.  We all know Social Security isn't the answer.  So what is it?  Just plan for our kids to take care of us when we are grandparents and great-grandparents?

[Patriotsfatboy1 1,432]

Just now, TBayXXXVII said:

True, but most do and the bulk always had until the economy took a dump.  My company used to match 3% for 3%.  Then from 2010-2017, they matched 1.5% for 3%.  Since then, they'll do 3% for 6%.  But again, that was the biggest benefit to the 401k.  If there is no match, there's really not much of an incentive to go with a 401 because you likely could do better by yourself.

What do you mean "do better by yourself"?

[Cdub100 3,380]

They should buy Bitcoin.

[Alias Detective 1,179]

1 minute ago, cmh6476 said:

I probably didn't state my position well enough.  There really isn't much incentive for employers to encourage employees to save more.  Pensions appear to soon be a thing of the past.  If we could get people to save and plan better for life after work, there would be less burden on society to take care of these folks later in life.  We all know Social Security isn't the answer.  So what is it?  Just plan for our kids to take care of us when we are grandparents and great-grandparents?

You don’t want my answer.  I’ve become very hardened in the past 25 years as someone in the field.

[Bert 1,091]

3 minutes ago, Patriotsfatboy1 said:

It will be an increase for me. I like the way that it is now, but I understand the rationale for the proposed change. 

The rational makes no sense when you have a progressive tax system.

[Cdub100 3,380]

3 minutes ago, cmh6476 said:

I probably didn't state my position well enough.  There really isn't much incentive for employers to encourage employees to save more.  Pensions appear to soon be a thing of the past.  If we could get people to save and plan better for life after work, there would be less burden on society to take care of these folks later in life.  We all know Social Security isn't the answer.  So what is it?  Just plan for our kids to take care of us when we are grandparents and great-grandparents?

How about this. If you can't prove you have other savings like a IRA, ROTH, HSA 403b or the dozen of other opportunities out there the individual has to pay more into Social security.

[TBayXXXVII 2,116]

1 minute ago, Patriotsfatboy1 said:

What do you mean "do better by yourself"?

Just go to someone like Vanguard or these other finance people and start your own account and invest what you want and where.  I haven't really delved into too my 401 plan all that much, but if I recall, there are "plans" / "packages" that you select and the money that I and my company contribute, get dispersed within that plan/package.  If I didn't get a match from my office, I could probably take that same 3% and do better investing with my own account than in the 401.

[nobody 2,037]

5 minutes ago, cmh6476 said:

I probably didn't state my position well enough.  There really isn't much incentive for employers to encourage employees to save more.  Pensions appear to soon be a thing of the past.  If we could get people to save and plan better for life after work, there would be less burden on society to take care of these folks later in life.  We all know Social Security isn't the answer.  So what is it?  Just plan for our kids to take care of us when we are grandparents and great-grandparents?

Save money without people incentivizing it for you?

[nobody 2,037]

By the way this is a tax increase on people making over 163k; not 400k.

[cmh6476 751]

Just now, nobody said:

Save money without people incentivizing it for you?

ideally, this would be great.  How realistic is it?

[TimmySmith 2,782]

2 minutes ago, Cdub100 said:

How about this. If you can't prove you have other savings like a IRA, ROTH, HSA 403b or the dozen of other opportunities out there the individual has to pay more into Social security.

Without investors contributing to SS, no money would go into the pot. 

[Patriotsfatboy1 1,432]

4 minutes ago, TBayXXXVII said:

Just go to someone like Vanguard or these other finance people and start your own account and invest what you want and where.  I haven't really delved into too my 401 plan all that much, but if I recall, there are "plans" / "packages" that you select and the money that I and my company contribute, get dispersed within that plan/package.  If I didn't get a match from my office, I could probably take that same 3% and do better investing with my own account than in the 401.

You might want to delve a little deeper into your plan. Many plans allow you to invest in funds just like Vanguard or Fidelity. In fact many have those exact funds and you decide where they go. My 401k actually has grown more in the last 5 years (16% annually with 4 different funds) than my brokerage account (12% annually) which is managed. 

Also, only about half (51%) of employers have a match according to this article: How Much Do Companies Typically Match on 401(k) in 2020? | MyUbiquity.com

[MTSkiBum 1,594]

I have no strong feelings on this either way. 

[cmh6476 751]

4 minutes ago, Cdub100 said:

How about this. If you can't prove you have other savings like a IRA, ROTH, HSA 403b or the dozen of other opportunities out there the individual has to pay more into Social security.

when did you get unbanned?

[MTSkiBum 1,594]

3 minutes ago, Patriotsfatboy1 said:

Also, only about half (51%) of employers have a match according to this article: How Much Do Companies Typically Match on 401(k) in 2020? | MyUbiquity.com

 

My company matches 100% up to 6% + they add some profit sharing into the 401k that can be a few percent more. Although the last few years we have not gotten that and I do not expect to get it this year or next year.

[Cdub100 3,380]

Just now, TimmySmith said:

Without investors contributing to SS, no money would go into the pot. 

I hate SS and think it's a ponzi scheme. If I could opt out and stop paying today and forfit my SS earnings later I would. I also understand this will never happen. But that's not what I was talking about.

What I'm suggesting to CMH is its obvious people are too stupid to invest in their future. My brother is one of those idiots. So instead of punishing those of us who do plan. Make the people who don't plan pay more into SS and they get more when they retire. The rest of us with retirement plans continue to pay the regular rate. The idiots pay more. There problem solved.

[Cdub100 3,380]

1 minute ago, cmh6476 said:

when did you get unbanned?

October 

My good buddy who lives here in Michigan is going to the Chefs game this weekend. You going?

[Patriotsfatboy1 1,432]

1 minute ago, MTSkiBum said:

 

My company matches 6% + they add some profit sharing into the 401k that can be a few percent more. Although the last few years we have not gotten that and I do not expect to get it this year or next year.

We have a decent match and have continued it this year. It is definitely a good thing as it is essentially "free money". People should contribute at least up to the match.

I know that there are all sorts of options out there. I just went through the explanation of all of these things with my oldest son. He is now in the union and he gets a pension and a 401k with guaranteed employer contributions regardless of what he puts in. I told him to never leave that union.

[cmh6476 751]

Just now, Cdub100 said:

October 

My good buddy who lives here in Michigan is going to the Chefs game this weekend. You going?

not this time.

[posty 2,296]

I thought we were all filthy rich, so why should any of us care about 401(k) and retirement?