Corrected title: Now the GOP has accomplished massive tax reform

[blackangst1]

So you're okay with the government telling you how much savings they will subsidize in a calendar year but not okay with the government telling you how much it will subsidize total? I do not understand the difference.

Because the current annual limits in place would amass a huge retirement portfolio. For example, just for numbers sake, if someone at age 25 starting maxing out 401k contributions ($1500/mo), by age 67 they would have almost $8M (assuming an average of 9%/year).

Now, how likely is this scenario? Realistically, not very for two reasons. First, most people couldnt contribute that much, but more importantly, even with the means to do so, most wouldnt. So why would I be against something that would only happen for a small group of people? Principle. It all comes back to 1. If you one of the lucky Google or Facebook engineers who can start saving early, and 2. you have the means to do so, IMHO its not the governments job to dictate how much is enough. Income taxation is one thing. But limiting how much someone can save? Um no. Sure it might be 3.4M in year one. But both Democrats and Republicans view investment as possible sources of income, and Im not confident they wouldnt go after more in the future.

Please keep in mind my opinion has nothing to do with offshore accounts, or other forms of investment available to high earners. This is specifically for the traditional 401k/IRA/SEPIRA/etc.

 

[ch33zw1z]

since my employer doesnt replace anyone who leaves, and im effectively performing 4 employees duties, the cut better mean a big ole increase and bonus.

 

[dphantom]

hope that works out for ya

I see no reason why it will not. We just purchased a lake front home as our second home so that is part of the reason driving the age of retirement. The bigger is we simply enjoy work and the benefits we get by having a solid middle class income (just barely upper) that we can use to fund our retirement plus some fun things.

 

[blackangst1]

in the end, its absolutely how much you have saved that will matter when the time comes

52 bucks a year, meh...

Yes, of course. But you missed my point lol.

 

[fskimospy]

Because the current annual limits in place would amass a huge retirement portfolio. For example, just for numbers sake, if someone at age 25 starting maxing out 401k contributions ($1500/mo), by age 67 they would have almost $8M (assuming an average of 9%/year).

Now, how likely is this scenario? Realistically, not very for two reasons. First, most people couldnt contribute that much, but more importantly, even with the means to do so, most wouldnt. So why would I be against something that would only happen for a small group of people? Principle. It all comes back to 1. If you one of the lucky Google or Facebook engineers who can start saving early, and 2. you have the means to do so, IMHO its not the governments job to dictate how much is enough. Income taxation is one thing. But limiting how much someone can save? Um no. Sure it might be 3.4M in year one. But both Democrats and Republicans view investment as possible sources of income, and Im not confident they wouldnt go after more in the future.

Please keep in mind my opinion has nothing to do with offshore accounts, or other forms of investment available to high earners. This is specifically for the traditional 401k/IRA/SEPIRA/etc.

They aren't limiting what you can save. They are limiting how much of your savings they choose to subsidize. If your employer says they will match your 401(k) contribution up to $5,000 are they limiting how much you are permitted to save or are they limiting how much they are willing to subsidize your savings? It's the exact same thing.

 

[blackangst1]

since my employer doesnt replace anyone who leaves, and im effectively performing 4 employees duties, the cut better mean a big ole increase and bonus.

Make your case on your annual review! GL!

 

[dphantom]

in the end, its absolutely how much you have saved that will matter when the time comes

52 bucks a year, meh...

It is not so much about the amount it is the habit, the discipline of paying yourself first. That habit, once instilled, will pay huge dividends later.

 

[blackangst1]

They aren't limiting what you can save. They are limiting how much of your savings they choose to subsidize. If your employer says they will match your 401(k) contribution up to $5,000 are they limiting how much you are permitted to save or are they limiting how much they are willing to subsidize your savings? It's the exact same thing.

Yes. I acknowledged that.

 

[fskimospy]

Acknowledged.

But if we want to have a serious discussion about how best to manage SS (for example), then we must put all options on the floor for debate.

I lived through one raise in the SS retirement age, Didn't want it then and wouldn't want to see it now. But its effect should be discussed, analyzed and accepted or rejected based on the analysis of all other options and what is best for SS solvency.

An important thing to note is that increases in US life expectancy have taken place almost entirely among the affluent. For poor or working class people life expectancy is stagnant or even declining.

What that means is when you raise the social security retirement age you're decreasing benefits for the people who need them the most because the people who need them the least are living longer.

 

[blackangst1]

Why would we only do one of those things at a time when they directly relate to one another? If you look back Republicans originally claimed that's what they were going to do, in fact. Lower rates and eliminate deductions. They later decided to just throw piles of cash at corporations. If they can't eliminate the deductions when they had the carrot of lower rates there is zero chance they are going to do it without that carrot. That's why you don't do one without the other.

In an ideal world, yes. But alas....

 

[fskimospy]

Yes. I acknowledged that.

Why isn't it the government's job to dictate how much of your savings it is willing to subsidize?

 

[blackangst1]

So why wouldn't they turn around and leave then? Why not cut the offsets at the same time? Seems that the GOP didn't have a problem with removing offsets that mainly benefited the middle class (personal exemptions, etc) while cutting rates. Why not the same for business NOW instead of some magical time in the future?

Because unfortunately congress does what it does. Both sides will fuck you, just with different instruments..

 

[ch33zw1z]

Yes, of course. But you missed my point lol.

no, i didnt. your point was habitually saving. my point was saving pennies for retirement wont necessarily matter.

 

[blackangst1]

Why isn't it the government's job to dictate how much of your savings it is willing to subsidize?

Thats not what I have a problem with. Its how they (some) want to do it. Theres a difference. For example, Im fine with annual limits in place.

 

[ch33zw1z]

Make your case on your annual review! GL!

management hears it on the regular.

 

[blackangst1]

no, i didnt. your point was habitually saving. my point was saving pennies for retirement wont necessarily matter.

This is my point:

It is not so much about the amount it is the habit, the discipline of paying yourself first. That habit, once instilled, will pay huge dividends later.

 

[ch33zw1z]

It is not so much about the amount it is the habit, the discipline of paying yourself first. That habit, once instilled, will pay huge dividends later.

im not arguing that. im saying that when people save for retirement, and do the math, a dollar a week is laughable.

 

[fskimospy]

Thats not what I have a problem with. Its how they (some) want to do it. Theres a difference. For example, Im fine with annual limits in place.

Then I don't understand what you are saying here:

IMHO its not the governments job to dictate how much is enough. Income taxation is one thing. But limiting how much someone can save? Um no.

The government is not limiting how much you can save, they are limiting how much of your savings they are going to pay for. What benefit does society get for the government to subsidize retirement accounts that already provide about $140,000 a year in passive income?

 

[ch33zw1z]

This is my point:

i very much undetstood your post. i added context for you.

 

[Puffnstuff]

since my employer doesnt replace anyone who leaves, and im effectively performing 4 employees duties, the cut better mean a big ole increase and bonus.

Job splitting and job enlargement for you brother with a pinch of stretch.

 

[blackangst1]

Then I don't understand what you are saying here:



The government is not limiting how much you can save, they are limiting how much of your savings they are going to pay for. What benefit does society get for the government to subsidize retirement accounts that already provide about $140,000 a year in passive income?

OK for whatever reason I keep saying how much you can save but I understand its how much is saved tax free. I get it. My shoebox comment acknowledges I understand.

I have a problem with it for exactly the two reasons Ive stated: retirement creep and principle.

Oh hi. I know we've allowed you to amass quite a bit in tax deferred savings in the past, but we've decided we're going to lower the amount. But hey...go ahead and open a savings account at Wells Fargo for post tax savings that wont keep up with inflation. 3.4M is enough.

OK maybe Wells Fargo was a bad example lol

 

[Engineer]

I'm not sure why we're talking about a $3.4 million lifetime limit when it has NOTHING to do with the current tax plan. Even the $2,400 didn't make it in but it was, at one time, part of the current tax plan that passed. Apples, oranges and whataboutism.

 

[blackangst1]

im not arguing that. im saying that when people save for retirement, and do the math, a dollar a week is laughable.

You certainly couldnt live off it, but again if people get in the habit of saving they will do so for their entire life. As their income grows (if it does) theyll save more. Warren Buffet had a quote 25 years ago Ill never forget: "There are two ways to accumulate alot of money. Alot of money and a little time, or a little money for alot of time. And most people have more time than money."

Compound interest is a wonderful thing. $5/mo at age 25 works out to $27k at 67., Just a simple example.

 

[blackangst1]

I'm not sure why we're talking about a $3.4 million lifetime limit when it has NOTHING to do with the current tax plan. Even the $2,400 didn't make it in but it was, at one time, part of the current tax plan that passed. Apples, oranges and whataboutism.

Because it was a side discussion.

 

[Engineer]

Because it was a side discussion.

More of a side diversion and if you think it's anything near the $2,400 that was proposed for the current plan, then I don't know what to tell you.