5 ms·

Maybe this made sense in 1978. But we are now in an era of zero fee trades, index funds, and microscopic management fees.

lotsofpulp 7y ago
I am alluding to the 401k contribution limit being $20k+ versus the IRA contribution limit being $6k. There is absolutely no reason why one should differ from the other, other than one benefits those who have employers that offer 401k. In fact, couples where one spouse who works for an employer with a 401k and one who doesn't are actually punished by lowering the contribution limit for IRA to zero. Someone explain to me why that was put into law. https://www.investopedia.com/401-k-vs-ira-contribution-limits-4770068 https://www.investopedia.com/401-k-vs-ira-contribution-limit...
- Ididntdothis 7y ago
  It’s pretty crazy that employers have any power over things like health insurance or retirement savings and play by different rules. These should be completely disconnected from employment. The only thing employers should compete on is things like 401k matching.
  - frockington1 7y ago
    My employer subsidizes my health insurance and contributes to my 401k and a pension. It's a nice perk and part of the reason why i work for them. It's a win-win
    - Ididntdothis 7y ago
      They can subsidize as much as they want. But they receive tax benefits that are not available to people whose employer doesn’t do this. In addition they choose health insurance and 401k providers for you. I am pretty sure their incentives and yours aren’t aligned so you may actually get a bad deal. It simply makes no sense.
      - frockington1 7y ago
        I'm not trying to be dense, I don't understand why this doesn't make sense. My employer offers salary, insurance, bonus, perks etc. and others do the same. I look at my options and take the offer I value the most. What part of the contract doesn't make sense? Most contracts have two parties with different incentives
        lotsofpulp 7y ago
        The part where because company A employs 5,000 people, and can segregate their employees into a healthier than average pool (since they're working, they usually are), they get access to lower cost health insurance to pay their employees with, and company B, a new startup trying to compete, has to pay higher insurance premiums on healthcare.gov because they don't have the established group of lives to create a separate insurance pool, and because they can't afford the overhead of administrative work involved with providing health insurance benefits.
        Ididntdothis 7y ago
        It’s all good. But it doesn’t make sense that the employer can choose to get a tax benefit. Every employee/person should have this tax benefit available no matter what the employer does. Your employer still can subsidize this, no problem.
        bluGill 7y ago
        It makes the contract more confusing, and often you don't even have complete information. You get two offers for different amounts, both with insurance - which is the better offer? If the higher offer includes worse insurance it may be the worse offer, but it is really hard to figure this out. In fact in many cases they won't even tell you enough about their insurance plan until after you accept so you didn't compare well. Even if we ignore the above, is the plan they offer right for you? If you don't have a doctor you can save a lot of money just taking an in-network doctor they assign to you - so long as they have enough doctors in network, and doctors are qualified it doesn't matter how many other doctors could see you. Or maybe you have one you like and are willing to pay extra for that. Both are reasonable choices for different people - but you don't get to choose. I'd personally take an extra $5/month in my pocket in exchange for a small in-network list of doctors (so long as it is large enough that I can get help when I need it), my wife is pickier and would pay an extra $10 to choose whatever doctors seems good at the moment - both are valid choices (I'm not sure what we would do if we actually had any choice in the matter: the conversation is only hypothetical now)
    - toast0 7y ago
      Employer based health insurance and what not makes it harder to compare job offers and increases your costs to switch employers. If instead, your employer simply paid you the money they would have paid to subsidize these things, and you paid for the services you wanted, you could actually keep your services in case you changed jobs or lost your job or took time off or whatever. It would be pretty hard to setup an individual pension that behaved like an employer pension, but pensions are already on their way out.
      - frockington1 7y ago
        Unfortunately the federal government subsidizes this behavior so I would need to spend more than what my employer does.
        toast0 7y ago
        Yes, and the question is why should the federal government subsidize distorting the employment market in this fashion? Or at least, why should they continue to do so.

lotsofpulp 7y ago

I am alluding to the 401k contribution limit being $20k+ versus the IRA contribution limit being $6k. There is absolutely no reason why one should differ from the other, other than one benefits those who have employers that offer 401k. In fact, couples where one spouse who works for an employer with a 401k and one who doesn't are actually punished by lowering the contribution limit for IRA to zero. Someone explain to me why that was put into law. https://www.investopedia.com/401-k-vs-ira-contribution-limits-4770068 https://www.investopedia.com/401-k-vs-ira-contribution-limit...

Ididntdothis 7y ago
It’s pretty crazy that employers have any power over things like health insurance or retirement savings and play by different rules. These should be completely disconnected from employment. The only thing employers should compete on is things like 401k matching.
- frockington1 7y ago
  My employer subsidizes my health insurance and contributes to my 401k and a pension. It's a nice perk and part of the reason why i work for them. It's a win-win
  - Ididntdothis 7y ago
    They can subsidize as much as they want. But they receive tax benefits that are not available to people whose employer doesn’t do this. In addition they choose health insurance and 401k providers for you. I am pretty sure their incentives and yours aren’t aligned so you may actually get a bad deal. It simply makes no sense.
    - frockington1 7y ago
      I'm not trying to be dense, I don't understand why this doesn't make sense. My employer offers salary, insurance, bonus, perks etc. and others do the same. I look at my options and take the offer I value the most. What part of the contract doesn't make sense? Most contracts have two parties with different incentives
      - lotsofpulp 7y ago
        The part where because company A employs 5,000 people, and can segregate their employees into a healthier than average pool (since they're working, they usually are), they get access to lower cost health insurance to pay their employees with, and company B, a new startup trying to compete, has to pay higher insurance premiums on healthcare.gov because they don't have the established group of lives to create a separate insurance pool, and because they can't afford the overhead of administrative work involved with providing health insurance benefits.
      - Ididntdothis 7y ago
        It’s all good. But it doesn’t make sense that the employer can choose to get a tax benefit. Every employee/person should have this tax benefit available no matter what the employer does. Your employer still can subsidize this, no problem.
      - bluGill 7y ago
        It makes the contract more confusing, and often you don't even have complete information. You get two offers for different amounts, both with insurance - which is the better offer? If the higher offer includes worse insurance it may be the worse offer, but it is really hard to figure this out. In fact in many cases they won't even tell you enough about their insurance plan until after you accept so you didn't compare well. Even if we ignore the above, is the plan they offer right for you? If you don't have a doctor you can save a lot of money just taking an in-network doctor they assign to you - so long as they have enough doctors in network, and doctors are qualified it doesn't matter how many other doctors could see you. Or maybe you have one you like and are willing to pay extra for that. Both are reasonable choices for different people - but you don't get to choose. I'd personally take an extra $5/month in my pocket in exchange for a small in-network list of doctors (so long as it is large enough that I can get help when I need it), my wife is pickier and would pay an extra $10 to choose whatever doctors seems good at the moment - both are valid choices (I'm not sure what we would do if we actually had any choice in the matter: the conversation is only hypothetical now)
  - toast0 7y ago
    Employer based health insurance and what not makes it harder to compare job offers and increases your costs to switch employers. If instead, your employer simply paid you the money they would have paid to subsidize these things, and you paid for the services you wanted, you could actually keep your services in case you changed jobs or lost your job or took time off or whatever. It would be pretty hard to setup an individual pension that behaved like an employer pension, but pensions are already on their way out.
    - frockington1 7y ago
      Unfortunately the federal government subsidizes this behavior so I would need to spend more than what my employer does.
      - toast0 7y ago
        Yes, and the question is why should the federal government subsidize distorting the employment market in this fashion? Or at least, why should they continue to do so.