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But the other half was money your employer matched, not money you contributed, correct?
Partially correct. The total amount is a result of employee and employer contributions and ROI. That employer contribution will be in lieu of salary/benefits. Many with 401/403 and pensions will lose those
The CEO was proposing a system in addition to SS, not as a bandaid to SS.
People aren't saving and SS is not enough to live on when you retire as your sole means of income.
The SS funding issue is a totally different issue.
And the fix to that is to raise FICA which hasn't been raised in 25 years.
I don't see it as a separate issue because it is unlikely we will do both. If this new system with mandatory contributions becomes reality, will we then also increase FICA taxes? IMO, no.
Partially correct. The total amount is a result of employee and employer contributions and ROI. That employer contribution will be in lieu of salary/benefits. Many with 401/403 and pensions will lose those
The same can be said of employer SS contributions, and those do not become part of your estate either.
You still are mostly right but it is an issue that you can't discharge student loans through bankruptcy, something those in the 1980's and 90's could do. If not for the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, it would be today. As I said also, it's not like young adults in the 80's and 90's didn't have student loan debt, it just wasn't an economic drag the way it is now preventing a lot of need based purchases that fully drive the economy. Want a new car, well I got a student loan to pay off. New house, still got a student loan. Have a kid, oh I'd like to but I still gotta pay for my student loan...
There is a reason why you cannot discharge student loans for the most part in bankruptcy, and those of use around at the time know it.
Students took out huge sums of money and either never attended or barely classes much less graduated. That or first rough patch they hit in their lives (or not as filing bankruptcy was quite easy then) they went to the courts. Doctors, attorneys, nurses and other professionals who had decades of career earnings ahead of them stiffed the federal government and by extension American taxpayers by filing bankruptcy and thus discharging their student loans.
The purpose of taking out a student loan is to enable the purchase of a good/service; higher education. If you did what you were supposed to do in college and continue thus after graduation over the course of your lifetime that higher education brings vast rewards. Yes, there may be periods of down but there are also up as well.
I knew college students back then who badly abused federal student loans. You didn't see them after the first day of classes, but they sure as heck showed up on financial aid disbursement day to get those checks. You didn't see them again or only off and on the balance of semester. Where did that money go? New cars, down-payment on a home, living expenses instead of working, vacations to Europe, and so forth.
I thought it was a bad idea too, until I noticed that this would give everyone access to the TSP. Now I'm thinking it's not so bad.
A better idea though, IMO, is to fix SS.
Universal access to the TSP lowest possible cost funds is the best idea I've heard in a very very long time.
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