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401k + boring old index funds. I started putting in as much as I could since my first job out of college. Still not even 35, and have already seen plenty of ret

by Apreche 10y ago

401k + boring old index funds. I started putting in as much as I could since my first job out of college. Still not even 35, and have already seen plenty of returns. Will I be the only person in my generation to be able to afford to retire?

throwaway201607 10y ago
Yup, and so the tyranny of majority will tax it all out of you, sacrifice your youth for a false promise of tomorrow.
- Jtsummers 10y ago
  401(k)'s (traditional) will be taxed anyways. That's the plan, it's deferred until you collect in retirement, or, potentially, on inheritance. This is also why you have to take the minimum payouts at 70 (? need to look up the precise age again). Suppose your suggested future comes to pass and they tax it earlier. At what rate? Which part of it? Fundamentally, it's a brokerage account and you've invested the money. Do they go back and find XX years worth of investments and say you owe that much in back taxes? Do they look at the present value? The former is moronic. People wouldn't have that much cash lying around, that would literally bankrupt the population. The second also fails to make sense because then they'd be taxing unrealized earnings on investments. This fear over 401(k) (and, relatedly, IRA) savings is generally unfounded.
  - throwaway201607 10y ago
    Well for example it could be a wealth tax... $1M of 401ks taxed just for existing. Edit: Or maybe you;d like to talk about government's straight up taking away assets: https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102 . Sure they gave them cash, but that could have as easily been "401ks are cancelled, they're being treated as income this year"
    - Jtsummers 10y ago
      And where would the cash to pay that tax come from? Would it be deducted from the 401(k) directly? That'd be the only way most people middle-class individuals could afford such a tax. EDIT: My point is this. If 401(k) accounts aren't safe, then literally no method of investment or saving is safe. There's no point fretting over this one particular one. If it turns out, in 20 years, that our retirement plans have been raided by way of taxation, then likely the rest of the economy is so fucked that the lack of funds in that account will not affect you in any meaningful way, as the dollar itself will have severely lost any value as there will no longer be any trust in the US government and economy.
    - Jtsummers 10y ago
      I missed your earlier edit. Apples to oranges much? One, that's an incident from 83 years ago. While it was upheld, legally, at the time it's unlikely it would fly today in a political sense. Especially for 401(k) accounts. Two, that was about hoarding. The gold in question was money not moving in the economy. The rationale for the two would be entirely different. You want to stop hoarding during severe economic times because moving money means jobs, manufacturing, etc. Sitting money does nothing. Money in a 401(k) is invested money. It's at least moving in the markets, or purchasing government bonds. Three, see my other post. By the time shit gets so bad the fed needs to consider this option, things will be bad enough that those accounts would be worthless. Four, forcibly moving money out of the markets like this would necessarily cause massive problems. Do you really think any government with half a brain would do this? Five, this is literally the people's retirement savings. These accounts exist so social security doesn't have to be expanded. Removing them introduces a major burden on the nation as the population ages, now without their retirement savings. Six, if you're really this fearful you need to live on a farm off the grid. There's no other way to be prepared for the apocalyptic future you see.
      - throwaway201607 10y ago
        off to the farm i go.
jaffa214525 10y ago
You will not be the only one. Join the community at r/financialindependence

by Apreche 10y ago

throwaway201607 10y ago

Yup, and so the tyranny of majority will tax it all out of you, sacrifice your youth for a false promise of tomorrow.

Jtsummers 10y ago
401(k)'s (traditional) will be taxed anyways. That's the plan, it's deferred until you collect in retirement, or, potentially, on inheritance. This is also why you have to take the minimum payouts at 70 (? need to look up the precise age again). Suppose your suggested future comes to pass and they tax it earlier. At what rate? Which part of it? Fundamentally, it's a brokerage account and you've invested the money. Do they go back and find XX years worth of investments and say you owe that much in back taxes? Do they look at the present value? The former is moronic. People wouldn't have that much cash lying around, that would literally bankrupt the population. The second also fails to make sense because then they'd be taxing unrealized earnings on investments. This fear over 401(k) (and, relatedly, IRA) savings is generally unfounded.
- throwaway201607 10y ago
  Well for example it could be a wealth tax... $1M of 401ks taxed just for existing. Edit: Or maybe you;d like to talk about government's straight up taking away assets: https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102 . Sure they gave them cash, but that could have as easily been "401ks are cancelled, they're being treated as income this year"
  - Jtsummers 10y ago
    And where would the cash to pay that tax come from? Would it be deducted from the 401(k) directly? That'd be the only way most people middle-class individuals could afford such a tax. EDIT: My point is this. If 401(k) accounts aren't safe, then literally no method of investment or saving is safe. There's no point fretting over this one particular one. If it turns out, in 20 years, that our retirement plans have been raided by way of taxation, then likely the rest of the economy is so fucked that the lack of funds in that account will not affect you in any meaningful way, as the dollar itself will have severely lost any value as there will no longer be any trust in the US government and economy.
  - Jtsummers 10y ago
    I missed your earlier edit. Apples to oranges much? One, that's an incident from 83 years ago. While it was upheld, legally, at the time it's unlikely it would fly today in a political sense. Especially for 401(k) accounts. Two, that was about hoarding. The gold in question was money not moving in the economy. The rationale for the two would be entirely different. You want to stop hoarding during severe economic times because moving money means jobs, manufacturing, etc. Sitting money does nothing. Money in a 401(k) is invested money. It's at least moving in the markets, or purchasing government bonds. Three, see my other post. By the time shit gets so bad the fed needs to consider this option, things will be bad enough that those accounts would be worthless. Four, forcibly moving money out of the markets like this would necessarily cause massive problems. Do you really think any government with half a brain would do this? Five, this is literally the people's retirement savings. These accounts exist so social security doesn't have to be expanded. Removing them introduces a major burden on the nation as the population ages, now without their retirement savings. Six, if you're really this fearful you need to live on a farm off the grid. There's no other way to be prepared for the apocalyptic future you see.
    - throwaway201607 10y ago
      off to the farm i go.

jaffa214525 10y ago

You will not be the only one. Join the community at r/financialindependence