3 ms·

As far as I can tell there is no good reason and it's an artifact of a somewhat confused legislative process. I definitely think the US system of tax deferred r

by harryh 9y ago

As far as I can tell there is no good reason and it's an artifact of a somewhat confused legislative process. I definitely think the US system of tax deferred retirement accounts could be simplified significantly. I do think there is some advantage to the fact that it's possible to have a portion of one's paycheck go directly to a 401k without ever hitting your bank account. You can't currently do that with an IRA. It seems like that could be fixed though.

lotsofpulp 9y ago
The simplest and in my opinion, the likeliest explanation, is that it gives large employers who can afford to offer 401k another advantage over smaller employers. Just like being able to offer tax exempt health insurance. It gets even stupider when you realize that IRAs have limits on deductibility when your spouse has access to 401k, but you don't.