Shocking Proposal To Destroy The 401(k) - What You Need To Know 

So some individuals in the U.S. Government may want to limit our options for us to budget and save for retirement, so they can take more of our money and squander it without sticking to a budget? Yeah, that totally makes sense...

Becoming a millionaire through a Roth IRA or a 401k involves different strategies for maximizing profits. A Roth IRA offers tax-free withdrawals in retirement, which can be advantageous if you expect to be in a higher tax bracket later in life. On the other hand, a 401k provides tax-deferred growth and potential employer contributions, boosting your savings. The optimal choice depends on factors like your current and future tax situation, employer match, and investment options. Consulting a financial advisor can help tailor a strategy that aligns with your financial goals and circumstances.

I love how the government doesn’t pay attention to all the money they already take from us, yet dwell on the “loss” from us having tax DEFERRED retirement accounts. God forbid Americans be able to save for retirement without being taxed TWICE on it.

You can totally trust the government. They will totally look out for you. Totally🙄 As Mark Twain once said, politicians and diapers must be changed often, and for the same reason .

This is an unbelievable take. Given how poorly the government has mismanaged social security, the 401k needs to get BETTER, not worse. I think $10k a year should be tax free FOREVER, both the initial contribution and gains.

These " Economists " are way off . Erin is correct on this for sure . These accounts will allow me to retire @ 56 ,After putting into them for 31 years . Starting @ $11.00 an hour .

I graduated in 1979, having been taught all my life that after getting out of the Army and trying a few things for a few years, I would find a job where I would work for 30+ years and retire on a company pension with Social Security as a supplement. Anything beyond that was why you opened a savings account at your local Savings and Loan. In the early 80’s we started hearing about these 401k funds, but that stirred up the memory of all those teachings about staying away from the evils of gambling and playing the stock market. Talk about some confused kids in the 80’s. It wasn’t until my 50’s that I realized that what I had been taught wasn’t going to get me anywhere. Change or die. For the last dozen years it’s been a mad rush to pay off all debt and throw as much as I could into the 401k. They don’t need to be changing the rules on us now because it took some of us 40 years to learn how to play this game.

The government already restricts 401Ks through "nondiscrimination testing." For instance, because not enough people participate in the 401K at my employer, I am only allowed to put 6% pre-tax dollars in. The authors of these papers also make an utterly insane assumption that any additional tax "revenue" would be used to shore up Social Security. It absolutely will not; the main reason SS is underfunded is due to the government constantly raiding the fund to dole out dollars to special interest groups.

I had my first access to a 401k in 1988, I saw owning my own future as much better than a pension. I went all in, saving at least 10% even when I was only making 10k/year at the beginning. By the time I left that first job in 1996 I was only making about 30k/year but I had 50k in my 401k and never looked back. Retiring this year at age 55 and between my wife and I we have about 3.5M in our 401k's. It can be done, but you have to make the effort and start early.

Let's give the government more tax money to squander. Good idea! In all seriousness, your take on the issue is really spot on, Erin. This option is only going to make lower income households less secure in retirement. I really have no confidence whatsoever in the government's ability to do what is best for the middle class any longer.

I know that changes to 401's would come, or even tax rates would go up eventually we may find out the deferred tax rate would not be favorable, It's clear that the government would attempt to address the retirement crisis, but making adjustments to 401k's are not a step in the right direction. sharing this with my friends and colleagues

401k's have a lot of problems. Taxes are loaded at the end in the form of RMD's. They are taxed as normal income as opposed to tax advantaged brokerage account options ie: long term capital gains and qualified dividends. Usually there are limited investment choices, along with high fees. You cannot harvest tax losses. The redemptions typically create enough income that most of your social security becomes subject to taxes. People generally are not savvy enough to take into consideration the investment options and tax implications.

Not true, the 401k has been extremely helpful for us to save for retirement. The real issue is, employees don’t contribute because many are living paycheck to paycheck.

So if we got rid of the tax incentives to invest in 401k’s, would that cause people to stop putting as much money into them? And in doing so, wouldn’t it make people more reliant on social security, thus causing the government to need even more funding for it?

How about requiring personal finance class before you can graduate high school. Crazy GOV!

First off, hats off to Erin for another insightful video - really hitting the nail on the head with these discussions. Now, onto the economic nitty-gritty of this proposal. It's akin to trying to solve a Rubik's Cube blindfolded - there's a lot of moving parts and potential pitfalls. You hit the nail on the head regarding the oversight in considering various externalities. It's like trying to bake a cake without flour - you're missing a crucial ingredient! In the realm of retirement savings, behavioral economics whispers in our ear, reminding us that human behavior is a wild beast that can't be tamed with a simple tax adjustment. By neglecting to account for the behavioral implications of removing a savings avenue like the 401(k), we risk further eroding the already shaky foundation of the three-legged stool metaphor. We've already seen one leg of the stool, pensions, kicked out from under us in the relentless march towards cost-cutting and bottom lines. Now, with the proposal to remove another leg by relying solely on Social Security, it's like trying to balance on a pogo stick - precarious and bound to end in a tumble. Furthermore, this shortsightedness fails to provide our society with the proper framework to foster a culture of financial resilience and independence. It's like trying to build a house with no walls - sure, you might have a roof over your head, but you're completely exposed to the elements. So, what externalities should we be considering? Well, for starters, there's the domino effect on individual savings behavior. Removing a savings avenue could send a ripple through the fabric of society, discouraging prudent financial planning and leaving individuals ill-prepared for the inevitable rainy day. Then there's the broader societal impact. By relying solely on government intervention to secure our financial futures, we risk further entrenching the cycle of dependence and stifling the spirit of entrepreneurship and innovation that has long been the lifeblood of our economy. In essence, it's not just about crunching numbers and balancing budgets - it's about recognizing the intricate dance between economics and human behavior, and ensuring that our policies reflect the values of resilience, independence, and self-reliance that define us as a society. So let's roll up our sleeves, dust off our calculators, and start crafting policies that build a future where everyone has the opportunity to pull themselves up by their bootstraps - even if they need a little help tying them first. And a big thank you to Erin for sparking this important conversation!

Good discussion Erin! Thanks for the content you consistently produce. The report doesn't mention that taxes are collected from traditional IRAs in two ways. 1) withdrawals in retirement years to provide funds above what is received through Social Security. 2) Forced income via RMDs which creates a tax torpedo and increases taxes via taxing 85% of SS as income. Additionally, tIRA funds passed to beneficiaries are taxed now on an even shorter timeline of 10 years. This can often cause these funds to be taxed at a higher rate to the beneficiaries than they would have been taxed to the initial owner of the accounts. Larry, Central Valley, Ca.

Typical; government spends too much money, so they go to their citizens to pay for it! And if you say the citizens are the "wealthy" who should pay their "fair share" it's a drop in the bucket. To really deal with SS and deficits, they would need to dip into middle class (yes, that is you and me!). $187 billion would not even put a dent in the issue. Politicians, please leave my savings/retirement alone. I have worked hard, had little debt, I am retiring in 2 years, please let me have the money I have worked, and saved for, and lived beneath my means to EARN! Thanks Erin for information

The one thing that bothers me with the employer 401k is the vesting period. There are some company’s that require you to stay with them 3-5 years before what they match is yours, meaning that match is lost if you quit or get fired forcing you to some golden handcuffs. There are lots that don’t match until you have a full year of service with them. I have seen some companies recently match and vest you on day one but I would say that’s rare. I feel if the laws were to change to forcing employers to match and vest on day one, it would really help boost the 401k be even more valuable to workers.

Just found your channel yesterday and started to watch several of your videos. I have to say: you are really well-spoken! Thanks for the wonderful content! :)

Not all employers match 401k contributions either, which makes it harder to save more.

Another great video, Erin! Thanks! I'd like to say 3 things: 1) People (and you in this video) mention that only the wealthy really take advantage of the retirement plans like the 401k. I'd like to offer that we became wealthy BECAUSE we took advantage of those plans. 2) In my opinion, altering the tax-deferred plans so that more taxes are taken out really only is a short term fix. Because those taxed dollar investments won't be taxed when people retire down the road, it will lower the government future collections. The social security fund was raided decades ago, the alarm has been sounding for decades. Its going to be a painful next couple of decades, but we shouldn't kick the can down the road with short-term solutions. 3) Again, in my opinion, companies should pay a living wage and encourage saving, instead of pandering to shareholders.

I love this video. I’ve watched some many where advisors are misleading their clients into thinking that Roth is always the right solution. They do this with the lie that contributing to a Roth after-tax is the same as contributing pre-tax to a traditional … not adjusting for tax. Then, after fake “equal” contributions after several years, when it’s time to withdraw, then voila here’s two identical buckets of cash … one you have to pay taxes on and another that you don’t … they don’t factor in the opportunity cost of lost tax savings … nor the effect that the tax has on their contribution ability. But math with finite resources/cash doesn’t work that way. They’ve been lied to so badly that when you try to explain the math to them … they can’t get past the brainwashing that Roth is always good because of “tax-free” growth and withdrawals. But nothing is free, you have to do the math properly.

Another great video, Erin. I was working for a company that started replacing the defined pension with 401k in 89. Even then there were doubts about SS for us (I was 35 at the time). Congress can shore up SS if they have the will to to do so but there is a faction that believe it to be a major entitlement program and have been trying to shut it down since they were drinking from kegs.. Retirees and those planning to retire in the next 10 years need to take a tip from the politicians and vote for "enlightened self interest."

Thanks, Erin! I agree with you 100% and this proposal is among the worst that I have ever seen. The primary author of this study is 81 years old - somehow I don’t think any of these proposed changes will impact her retirement one iota. For the rest of us trying not to rely on an already overburdened social security system, these proposals would be disastrous. If any of us see this drivel making its way into a congressional proposal, it would behoove us to tell our representatives loudly to kill the bill.

Another excellent video Erin. I agree with you 100%. 401ks are one of the most important tools in securing your retirement. I am a perfect example of this. I graduated from law school in 1981. I spent the first 10 years of my career working in a government law office. We had a 457b plan, which is the government equivalent of a 401k. There was no match. Every year I worked there I contributed the maximum. After 10 years I left that there and took a job with the law department of a Fortune 500 insurance company. I started there in 1991. We had a 401k that the company matched up to 6% of your salary. In addition, we had a defined benefits pension. I worked at this company for 30 years. Every year, I contributed the maximum amount and received the full company match. When I turned 50, I also contributed the full catchup amount. I was extremely fortunate in that I was old enough and had been with the company long enough to get grandfathered for the pension when they discontinued it in January of 2016. My wife was also an attorney and spent a significant portion of her career working for a different insurance company’s law department. She also had a 401k that was matched up to $5000 of her contribution. I retired on December 31st of 2021. Unfortunately, my wife passed away four months before I retired. After I retired, I rolled both 401ks into an IRA. I now have over $5,000,000 in that account. But for these amazing vehicles, we would never have had that much money. The 401k has given me financial freedom and a very secure retirement.

Excellent point Erin. The true impact on people using these plans will not be known for many more years. I lucked out - starting using them early since I was in the industry. I am a relatively early adopter, and have always been focused on finances. However, as you point out, there have been numerous advances in that time period. Much more information available today due to technology, lower fees on investments, more investment options including index funds, and enhancements to the programs themselves - most notably auto enrollment and escalation. Well thought out response on your part. Kudos!

I remember back in 1994 when my employer got rid of their pension plan and started the 401K. I hadn’t been there long enough to be vested in any part of the pension, so I started contributing to my 401K. That was 30-years ago and if it had not been for that retirement savings vehicle, I could have a bleak retirement outlook today. But it has helped me secure my future, and I never made more than the average or median salary… I actually made substantially less. I also think 401K’s are much better than they used to be, so they are more advantageous to younger generations. Back in the 90’s, the fee structures were well hidden and quite high, and most plans did not have a diverse set of funds to choose from; target funds weren’t even a thing. They also weren’t as well understood by the common individual as they are today, and financial literacy was not as easy to research or come by before the internet.

Absolutely agree that the way to fix social security is to continue to step up the taxable earnings cap without cutting benefits or increasing the retirement age. If properly funded by employee and employer contributions, the 401k is a valuable and essential tool. We should be growing the pre-tax contribution limits - not lowering or eliminating them.

Very well done.

Excellent summary of the issues. My first few jobs had profit sharing as retirement. Of course they were set up to insure there were little or no profits to be shared along with inevitable bankruptcies. I started with defined contribution plans with matching in 1986. I didn’t know enough about investing or retirement funding until 2008 or so. Throw in children with severe illness and just absurd medical bills and really amazing I was able to retire. The average person is really unable to plan 40 years out for retirement. I credit shows like yours with really helping to tackle this challenge. I wish you had been around 25 years ago. Keep it up. Great job.

Outstanding points. Preach!

Money is a mystery to lots of us, but we mostly all get old. My 401K made it very easy to start saving at 7% of my income and put 1/2 of my raises into my 401K. With a generous 7% 401 match, I'm at 11x my annual income in less than 20 years. The 401K might or might not be the best retirement tool, but it's possibly the only tool some of us need.

I agree with your perspective. I don't see how removing saving and investing options will help people in retirement. And I don't like the idea of relying more on the government to fund our retirement. The government doesn't always have our best interests in mind.

Another great video Erin! Well done.

Great info.. thanks

I read the report. Not once do they mention retired people withdraw money from these accounts and pay taxes which would offset the tax lose. They don’t mention when you inherit an IRA you have 10 years to liquidate it and you pay taxes on it. They also use studies from Europe on saving rates to support their claims. Their position seems to be only rich people benefit from it so it must be bad.

Whenever folks base an argument on carefully selected statistics, it is wise to dig deeper. Averages can be very deceptive, Medians are often more useful since they discount the impact of the extremes (in both directions). An example could be if you take 10 families with an average of $100K in savings, but underlying that average is the fact that one family has $1,000,000 and 9 families have $0. Making a proposal based on the average works for no one in that case, but might look good in a headline or speech. Erin did a good job of reminding folks of this kind of data manipulation.

one of the best things that happened to me as a new and definitely not financially savvy entrant into the workforce in the mid-80's was my employer mandating that 5% of my salary (plus their match) go into my 403b. As I now begin to contemplate retirement, I know it will be on my terms and not driven by any money worries. I would hate to see that possibility taken away from others.

Retirement saving/investment not only benefits the individual's future years, it benefits the economy and the society as a whole. Any ideas/proposals that hinder investment/saving will have unintended negative consequences to wealth building for both individuals and the government. Thank you Erin for your wonderful and informative videos.

All of my retirement accounts are roth. Govt is getting absolutely nothing when im done in the workforce.

The government needs to reduce spending like companies do - there is too much waste in government. Government needs to learn how to deliver services at a lower cost. If they increase the taxes now, then Congress will just spend it for stupid programs and not allocate it to Social Security. Also, in their calculations, did they factor in the future dollars that would be collected when RMDs start? Plus the amount that has been growing in 401K accounts over the last 20-30 years? RMDs are additional taxes to be collected on that growth. If we tax everything now, and people put money into Roth accounts or HSAs then there will not be taxes collected on those account balances when pulled out in retirement. And Social Security payments would not be taxed. The point is the government wants to get the dollars now, but in the future there will be less taxes paid from retirees. At least that is how I look at it.

Well said. Great communication skills!

Why doesn’t the govt have to be fiscally responsible? Why does our government get to spend and spend and spend and spend and not be held accountable? Any other entity wouldn’t be allowed to get away with this. Wasteful and inefficient practices shouldn’t be bailed out by the blood, sweat and tears of the American people. This is asinine and must stop!!!

How about all the lost revenue from capping Social Security to the first $168K of taxable income? Doesn't look like they mentioned that as an option in the paper.

My three favorite channels: Erin Talks Money, Stock Brotha, & How Money Works. Make my week complete! 🔥 🔥 🔥

Thanks again for another great video Let’s hope common sense prevails, and we get to keep things the way they are

Picking up a copy of Money magazine in the 80s was the one of the best decisions I ever made.

Engagement for Erin. Keep up the great work! (I know she's married, wrong kind of ENGAGEMENT)

The silly thing is that traditional contributions are still subject to social security taxes, so they're not harming that system anyway.

I agreed with all your points. Thanks for an informed video

New subscriber to your channel. Erin, you are a treasure! Wife and I both turn 63 this year, still working and in good health. Keep up the great informational posts. Your way of plain speaking is a breath of fresh air. Thanks again for all you do!

Gee, imagine that! The people that are the most heavily taxed are the ones that are most interested in tax breaks. Who would've thunk it?

This is completely bogus. I love how they are saying there’s not enough being saved .. while simultaneously saying the tax deferrals are losing the gov too much $. Erin, why don’t you remind them of the 3-legged safety net rule. Also, kudos to you to explaining how much harder it was to be part of a 401k plan, maybe even only a dozen years ago it was MUCH harder to manage. I would love to know how the rate of savings in 401k plans has changed, including the contribution matches. Not only that, but the change in asset location over time.

this is a great summary! completely untreated, are related to San Francisco 49ers Quarter Back Brock Purdy?

Well said. Knowledge is power!

I think the actual numbers of people (vs averages and medians) using these plans are important. Did I miss them or were they not in the study? 401k and Roths are the main reason I could retire early at 52. Agreed I am an anomaly because I understand taxes and the benefits of saving. I also have the wherewithal to use and stick to a budget. Interesting thumbnail LOL.

@7:52 There were also no Target Date Funds in the 80s. Pretty sure there were no robo-advisors either. There were index funds, but those were very new at the time. It took time for index funds (and the Boglehead approach) to gain traction. To this day, I'm pretty sure there are still numerous people who are unaware of them.

In the 1990's, I started my second job after college with a large Southern California private company and, they provided each employee with both a traditional pension and an optional 401(k) with a 2 percent company match up to your first 4 percent. In the 2000's, at my third job with a local City, they provided me with a traditional pension and 457 plan with a 4 percent match. Today, it is hard to find a private firm that lets employees have both a traditional pension and an optional 403(b) or a 401(k).

First time watching your video. Really loved the information you were talking about. Liked and subscribed.

I think you made a valid point about increasing the amount of earnings subject to Social Security taxes without increasing the benefits. Requiring all government workers to contribute to Social Security would also help. And a small raise in the SS tax for everyone else would also help. I think the benefits are already skimpy, so I'm not sure I'd be in favor of cutting SS benefits. I do think they do need to do something about SS disability fraud, though.

We retired 7 years ago, and our 401K's were enabled us to save a nice nest egg. Without it, I am sure we would have spent most of that money. Let's hope Congress doesn't remove this excellent way to save!

You are the voice of reason!

Very interesting video essay. I would like to know what retirement looks like since, say 1960. What is the average amount of retirement income. How much is Social Security, how much is pension income. How many retired people live mainly on Social Security. I don't think that we can suggest tax policy until we have some idea about how well people have been providing for retirement. Social Security was meant to help relieve poverty among seniors. Has it done so?

Or, you could just not put a cap on social security taxes on the wealthy. That would fund social security for the foreseeable future by some multiples. Tax billionaires.

We are the government and we’re here to help. You can imagine why we are a bit skeptical.

Very informational.

I was unaware of the 401k plan until the late 90's and did not have access to one until 2008, my mid 40's. I think my experience is a fairly accurate representation, or reason why participation rates by both employers and employees were only 13% per your example.

Ok. And they could cut military spending by 20% and get to the tax revenue being lost by tax deferred accounts. Or if you don’t want to cut that much of the military budget a combo of military cuts and cutting corporate tax loopholes easily gets us there. Also since the 401k is fairly new we don’t yet have a “critical mass” of that revenue from people withdrawing from 401k to finally get back that tax revenue. Yes present value of money says that deferred tax has less value than current tax. But we don’t yet have a retired base that is primarily 401k. That’s more Gen X who isn’t generally retirement age yet.

I have a better idea- leave our private accounts alone and get rid of Social Security. I’m getting a much better return on my money in my IRA than I will get on SS, assuming I get anything for SS.

Another thing that is not mentioned in the numbers is the amounts taken from current IRA that people now pay taxes on, inherited IRAs that need accelerated distributions, early distribution penalties, and other ways that taxes are being paid on the back end of the IRA path. This is happening today as people who started plans in the early 1980s are now retiring.

Well said!

F that. They can keep every dime I’ve contributed to SS right now if they just let me handle my own retirement. These idiots are not fiscally responsible and I can do a much better job on my own.

Luckily this proposal would never actually pass into law. Any politician who supported it would get voted out asap.

Business are also allowing enrollment earlier like after a couple of months instead of waiting a year like I had to do 20 years ago

Erin, probably one of the most important pieces of content you've put out. It stands as a warning to the rest of us to always keep vigilant about what our government does, or is being advised, to do. A couple of thoughts: One, people that were in the work force when tax-advantage savings became law still, for the most part, had access to pensions. That has dwindled over the past few decades, and I would be interested to see the demographics vs. participation rates (I think you've done one on that in the past but I don't know where it is). Second, those individuals are just now getting to RMD age, which is what the government is waiting for. Third, there's no credit given to individual savings and how those investments have positively affected the overall economy, which is not the author's goal. Their view, which has been shown to be faulty many times in history, is that increasing the burden on individuals is the proper way to increase tax revenues.

You must remember that you will have to pay the tax on the money you contribute to a traditional 401k or traditional IRA, eventually when withdrawn. And if you have any left over after you pass away, that tax liability will transfer over to your heirs. Yes, it sounds great to be able to contribute pre-tax income that is put into those accounts without paying the taxes at that time. However, you have to look at those accounts as having the government as a "partner" or having the government's hand in your pocket. When you withdraw from the 401K or IRA, you will be taxed as ordinary income, and that bill will be higher than you think. And it may hurt to pay income taxes on the amount contributed to a Roth IRA or Roth 401K up front, but you won't have to ever pay taxes (or their earnings/investment gains) on the amount in those accounts after that.

How does putting a cap on the total amount saved make it harder to save? We can calculate the cost of a middle class retirement, past that point, congratulations, but we don't need to subsidize or incentivize additional saving.

Traditional 401k's and IRAs are even more attractive in income tax States. In Oregon they take your AGI (i.e after 401k/IRA deductions) in order to assess the State income tax So you can avoid both Fed and State taxes on the witheld money. You can also move to a non income tax State prior to RMD age and thus avoid the State tax on the way in and on the way out. I maxed out all the pre tax savings I could between 2003 and 2014 and invested in stock market index funds.. I'm sure glad I did!

Thank you.

As someone that grew up poor and was told over and over that only people that are born with a silver spoon will ever have any money; I can tell you that those same people also turned around and spent money on cigarettes, booze and "extracurricular" activities that would have funded their retirement. If the poor are being disproportionately affected, it is 99% due to the choices they make.

Erin, you are 100% correct. The authors of this plan are completely wrong, and it would devastate retirement savings if their recommedations were followed. It is ludicrous to think that any increased tax revenue would actually go to prop-up Social Security. Congress would find other ways to spend that revenue!

Back in the day,I had subscriptions to Money, Kiplingers, could also read Forbes, and there were a few other magazines. I started researching mid 80s. Started investing with no match In my employer tax differed plan in early 90s. Roth had not started yet and I did this on top of my pension. I can say I do wish I had paid more attention when Roths began, but I just set everything and forgot it. Now I find myself having more retirement income than I did when I was working or I will when I start collecting it. I also did some research on line from financial websites.

You look a lot like the actress Helen Hunt. Great video. I am retired and probably over saved, but I don't regret it.

The problem is that everyone cannot participate in 401k. If you have the option you can save 30k in 401 and IRA per year. If not covered you have 7k to save. Amount you can save should be the same for all.

@2:07 The real question is "who deserves the savings? An inefficient government that wastes money on nonsense wars, overpaid bureaucrats, and dishonest politicians? Or an individual who is being smart and responsible with personal financial planning?" The government doesn't have a "lack of funding" problem. It has a "mismanagement of funding" problem.

One of the craziest things I learned in Income Taxation class was this idea the government has that every dollar they don't tax is an "expenditure" from the Treasury. In other words, every dollar is theirs, and whatever they let you keep is largesse. Utterly shocking.

Excellent analysis

Remove the income cap on SS taxes. Include stock options as well.

Despite the fact that I invest, I am saddened by my inability to evaluate each company's performance and determine whether or not this is the ideal time to purchase stocks. My monetary stockpile is being depleted by inflation. At this stage, I need accurate market trajectory data, but I'm not sure what to do.

I’m glad you mentioned the cap on income….. why are people not screaming about this?? Every one gets taxed at fica rate for ALL incomes…… seriously this would have to solve many problems!!!!

Thanks for the video. Don’t get me wrong, I love my 401k and should get pretty close to maxing it out this year but I think you dismissed the research paper too lightly. You showed great facts about access to 401ks, participation rates and median balances. All those data points showed that 401ks aren’t working for the average American. Sure 401ks are relatively new but someone that is 55+ has still had robust access to 401ks and online finance information for at least the last 20 years so it is extremely problematic that their median balance is only $70k. I think another talking point you missed is the fact that companies can “match” $46k into someone’s 401k which only benefits the highest income earners. I think your ultimately point about making retirement savings easier is absolutely correct but there is definitely a lot more to hash out on this topic.

Oh no 185B in lost taxes! We're sending ANOTHER 90B to Ukraine. How about not sending that and putting into SS?

Wildly, that "185 billion" figure is almost exactly what the IRS reported collecting last year in previously uncollected money from high earners - just from enforcing the existing code.

I think there are two basic problems with a 401(k) number one most people do not start early enough and I get it to a point when you’re young and you’re not making much money it’s hard to chuck money you don’t feel like you have for retirement you feel you will never make it to But starting early and being consistent is very important and number two diversify it don’t put all of it in that safe category because what your leg to believe is you won’t lose any money in that safe category and chances are you won’t but you’re also not gaining any. That’s the problem What you’re not told is if you put it in the safe category you will actually gain a ton of money. The reason they call it not safe category is because it’s like a roller coaster. It goes up and down very frequently, but at the end of the day the average is much higher and that’s what’s important But too many people wanna play it completely safe and they don’t actually gain Jack on their money

Amazing proposal. I’m moved to tears by the government concern for the elderly

Great video! I do wonder how ss will play out given the obvious funding shortfall coming this decade

I would love to opt-out of social security and invest the money myself.

8:55 - Late Gen X and Early Millennial parents need to start the ball rolling on this for their kids. By the time your kids reach adolescence, you need to quietly start a retirement fund for each of them, in their names. Fund it to the tune of about $800 to $1600 per year, into a separate brokerage account under your financial advisor's management and your control. That way, they'll already be starting out on the right foot for long term growth, accelerating the snowball effect and they'll have something to watch and contribute to as they progress through their own working lives.

Social Security has a funding problem due to its pay-as-you-go system where there are about 3 workers for each retiree compared with 30 workers for each retiree in the 1930s. The issue with 401k plans is their captive nature based on the plan provided by the employer including expensive fund options. Workers should be allowed to select the low-cost provider of their choice (e.g., Fidelity, Vanguard, etc.), and the company match should be deposited in the account selected by the employee. 401k plans should not have the ability to either withdraw their money or take out loans to prevent leakage. We can't borrow from our future Social Security benefits, thus we should not be able to do that in a 401k plan. SECURE 2.0 did not address the expensive plans nor did they address the maximum differences for retirement accounts for workers without access to a 401k plan and those without.