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It's like they want us to be permanent slaves to the system. Same reason why they create all this monetary inflation. If everyone could save and retire by 40 then the government wouldn't be able to tax as many people. The government wants you WORKING and SPENDING MONEY because that's how it gets a slice of your money. The government hates people who want to save their money and have a simple life.
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Quote:
Originally Posted by KonaldDuth
It's like they want us to be permanent slaves to the system. Same reason why they create all this monetary inflation. If everyone could save and retire by 40 then the government wouldn't be able to tax as many people. The government wants you WORKING and SPENDING MONEY because that's how it gets a slice of your money. The government hates people who want to save their money and have a simple life.
If more than a handful of people wanted to "save their money and have a simple life", nothing would get done and this country would be stuck back in the 19th century progress wise. Think outhouses, no electricity, no air conditioning, no television, no cell phone, no computer etc etc etc
It's like they want us to be permanent slaves to the system. Same reason why they create all this monetary inflation. If everyone could save and retire by 40 then the government wouldn't be able to tax as many people. The government wants you WORKING and SPENDING MONEY because that's how it gets a slice of your money. The government hates people who want to save their money and have a simple life.
You can withdraw it but there will be a penalty. When you open a tax-favored retirement account you agree to those terms in exchange for the tax advantages. If you plan to retire early simply put the money in a different type of account. You can't have your cake and eat it too. Tax policy is about incentives. The tax breaks for retirement accounts are designed to incent people to save, not incent them to retire early.
You can withdraw it but there will be a penalty. When you open a tax-favored retirement account you agree to those terms in exchange for the tax advantages. If you plan to retire early simply put the money in a different type of account. You can't have your cake and eat it too. Tax policy is about incentives. The tax breaks for retirement accounts are designed to incent people to save, not incent them to retire early.
Exactly--it is supposed to encourage saving for retirement, but it is also a tax shelter. Seems pretty simple to me.
The penalties are there to prevent early withdrawal. Locking it down until you're 60 means that most people will have available what they saved at 61, 62...70...80. YMMV
It's like they want us to be permanent slaves to the system. Same reason why they create all this monetary inflation. If everyone could save and retire by 40 then the government wouldn't be able to tax as many people. The government wants you WORKING and SPENDING MONEY because that's how it gets a slice of your money. The government hates people who want to save their money and have a simple life.
No, that is not it at all.
History has shown when given options for easy access many will spend and or even deplete savings long before they are needed.
In both fiction and real life there are scores if not hundreds of examples of persons pulling their "life savings" out of various accounts to fund anything from a "get rich quick" scheme to some sort of perceived "emergency". Either way what usually happens is they end up broke, and with more days behind them than in front no way to replace those savings including benefitting from compounded interest.
Thus the government forces persons to leave the money where it is unless there is a true emergency. Only such events would (or should) drive people to take out their retirement funds from said accounts early incurring the huge penalties.
History has shown when given options for easy access many will spend and or even deplete savings long before they are needed.
In both fiction and real life there are scores if not hundreds of examples of persons pulling their "life savings" out of various accounts to fund anything from a "get rich quick" scheme to some sort of perceived "emergency". Either way what usually happens is they end up broke, and with more days behind them than in front no way to replace those savings including benefitting from compounded interest.
Thus the government forces persons to leave the money where it is unless there is a true emergency. Only such events would (or should) drive people to take out their retirement funds from said accounts early incurring the huge penalties.
Is this subject so hard to understand for some?
As you and others have posted, if left to their own devices, many people will sabotage their future for some fun today. To those that say "so what, they're adults, let them do whatever they want", do you want to be stepping over poor, old, sick people in the street on your way to buy some milk?
That's only part of the problem. Old, sick people with no money and no healthcare are a danger to the rest in that they pose a health risk to the rest of us by spreading sickness and disease.
You're free to save non-retirement / after-tax money and use the principle tax-free at any age. I'm retiring at 55 (13 years from now) and have substantial retirement and substantial non-retirement savings.
I've mentioned before that I believe the 59.5 age for penalty-free withdrawal will be raised to 64.5 in the near future, and maybe 69.5 later on.
Last edited by Nepenthe; 06-22-2017 at 01:11 PM..
Reason: spelling
The government doesn't "make" you do anything with the retirement accounts, or disallow you from doing anything... you're supposed to pay taxes on all your income. You are CHOOSING to play the retirement account game because you want to limit your tax liability. You can opt out of this system altogether by not trying to shelter any of your money from taxes. Isn't that why people even have retirement accounts anyway - saving is secondary to skipping taxes.
What does the government get by putting restrictions on these accounts? Well, it gives bankers more money to invest, earn interest from, play with, etc....
So you won't p**s it away on vacations and fancy cars.
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