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Old 03-28-2015, 07:21 PM
 
13,909 posts, read 7,411,228 times
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Quote:
Originally Posted by Southern man View Post
Whatever, but the exact year wasn't the point.
Yeah, but those of us who entered the workforce around 1980 typically didn't have either a defined benefit pension or a 401-K. Most employers were really slow to offer them. The first one I had access to was in 1989. I never had an employer match anything until a few years ago.
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Old 03-28-2015, 08:51 PM
 
6,353 posts, read 5,163,159 times
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Quote:
Originally Posted by lurtsman View Post
As a financial analyst, I just have to point out that catch up provisions are incapable of ever closing the gap in a truly meaningful way. By the time the kids are gone, most of the pieces are set on the board. If you aren't most of the way to having your retirement funded, you won't get there without a huge cut in lifestyle or dramatic increase in income.
I'm also a financial analyst.

After the kids are gone, some couples manage to save 50% of income (really!) through a huge cut in expenses (no college costs, kids out of the house) and a dramatic increase in income (spouse goes back to work, second job or side business, peak earning years are usually in the 50s). At least that was my experience...
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Old 03-28-2015, 09:50 PM
 
Location: Sacramento
13,784 posts, read 23,813,363 times
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Quote:
Originally Posted by GeoffD View Post
A law to require employers to do 401-K matching is only going to accelerate the erosion of the middle class. It will simply be more incentive to either offshore jobs or automate them.

A tax credit is kind of nuts. Federal income taxes are already at historic lows. You want to heap on tax credits?

401-K and IRA distributions occur when you have little other income. Very few retirees pay much in the way of Federal income taxes. I don't see any reason to change the tax code for the very small number of retirees who show very large incomes at retirement. The mandatory distribution for a tax deferred retirement portfolio of $1 million at age 71 is $38K. The Federal income tax bill on that is chump change even if you also have the maximum $41K Social Security benefit.

I think the only real solution to this is to require people to save for retirement. More than half the country has a fancy cell phone with an expensive plan, a big cable TV bill, a fancy car with a car payment, but zero retirement savings. I'd intertwine it with health savings accounts. If you're young and healthy, your HSA flips to an IRA account at the end of the year.
The comment about employers eliminating jobs is also used for raising the minimum wage, which is far below the comparable historical norms. The article linked in the original posting on this thread suggest folks who already have dwindling incomes should have less current income in order to save for retirement.

Regarding the tax credit idea, the tax credit would replace the current tax deduction, not be in addition to the current deduction.
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Old 03-28-2015, 11:34 PM
 
33,046 posts, read 22,067,502 times
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Quote:
Originally Posted by TuborgP View Post
In all candor! The emerging reality may be to live at a lower standard of living than others. There are very few guarantees in this life and we are beginning to be unable to afford some of the ones we think we have. Read the budget proposals from the House and Senate. While the other side of the aisle may disagree, have they figured away of paying for their goals short of a future bankruptcy? Future solutions are going to depend more and more on individual behavior and their ability to ADAPT!

Government does a very poor job of dealing with downward mobility. Government is the greatest obstacle faced by those who would like to affordably and sustainably downsize to a tiny home.
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Old 03-28-2015, 11:41 PM
 
33,046 posts, read 22,067,502 times
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Quote:
Originally Posted by Southern man View Post
When my company started its 401k plan around 1974, we had lots of people that refused to participate. The kids of those people are in the workforce today and I suspect they don't participate . The rule I lived by is pay your self first.

Good luck paying yourself first if you make minimum wage and have a pile of student loan debt. Student loan lenders think you should pay them first and they have the power to enforce it.
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Old 03-28-2015, 11:46 PM
 
33,046 posts, read 22,067,502 times
Reputation: 8970
Quote:
Originally Posted by GeoffD View Post
A law to require employers to do 401-K matching is only going to accelerate the erosion of the middle class. It will simply be more incentive to either offshore jobs or automate them.

A tax credit is kind of nuts. Federal income taxes are already at historic lows. You want to heap on tax credits?

401-K and IRA distributions occur when you have little other income. Very few retirees pay much in the way of Federal income taxes. I don't see any reason to change the tax code for the very small number of retirees who show very large incomes at retirement. The mandatory distribution for a tax deferred retirement portfolio of $1 million at age 71 is $38K. The Federal income tax bill on that is chump change even if you also have the maximum $41K Social Security benefit.

I think the only real solution to this is to require people to save for retirement. More than half the country has a fancy cell phone with an expensive plan, a big cable TV bill, a fancy car with a car payment, but zero retirement savings. I'd intertwine it with health savings accounts. If you're young and healthy, your HSA flips to an IRA account at the end of the year.

Half of all low-income renters spend at least half their income on shelter, according to Mortgage News Daily. Requiring them to save for retirement is nuts.
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Old 03-29-2015, 08:59 AM
 
Location: The South
5,226 posts, read 3,637,448 times
Reputation: 7916
Quote:
Originally Posted by GeoffD View Post
Yeah, but those of us who entered the workforce around 1980 typically didn't have either a defined benefit pension or a 401-K. Most employers were really slow to offer them. The first one I had access to was in 1989. I never had an employer match anything until a few years ago.
I entered the workforce in 1964, guess what, no 401k until 1978, no IRA, did have a retirement plan that was vested after 10 years. we had a savings plan that enabled you to buy company stock at market, but no commission. I started in that in 1965, $25 per month. When IRAs became law I started one. I have always saved, invested and taken advantage of any thing offered. All this time, many of my fellow workers were crying about the SS system would be broke by my retirement and my company would be bankrupt.
You have to pay yourself first.
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Old 03-29-2015, 09:02 AM
 
Location: The South
5,226 posts, read 3,637,448 times
Reputation: 7916
Quote:
Originally Posted by freemkt View Post
Good luck paying yourself first if you make minimum wage and have a pile of student loan debt. Student loan lenders think you should pay them first and they have the power to enforce it.
So you have student loan debt and make minimum wage?
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Old 03-29-2015, 09:20 AM
 
Location: Grove City, Ohio
10,134 posts, read 12,390,523 times
Reputation: 13984
Quote:
Originally Posted by Southern man View Post
So you have student loan debt and make minimum wage?
I would be interested in knowing what the degree is in.
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Old 03-29-2015, 10:01 AM
 
29,782 posts, read 34,876,173 times
Reputation: 11705
Quote:
Originally Posted by Larry Siegel View Post
I'm also a financial analyst.

After the kids are gone, some couples manage to save 50% of income (really!) through a huge cut in expenses (no college costs, kids out of the house) and a dramatic increase in income (spouse goes back to work, second job or side business, peak earning years are usually in the 50s). At least that was my experience...
And the experience of many others. House wives who interrupted a career can begin to reacquire SS benefits.
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