Why It's Time to Retire the 401(k)

[nitro]

http://www.time.com/time/business/article/0,8599,1929119,00.html

Is it time to go back to pensions?

I am heartbroken. I see more old people, particularly older women, begging on busy streets. These are not scammers. I understand that the logic doesn't follow between what I see on streets and the 401k situation, but by gawd man, the population is aging rapido and if something is not done, our parents are going to be on the street! I am ashamed to live in the richest nation in the world that has allowed it's elderly to be treated like this.

The 401k system doesn't work, at least not without supplement. It is probably too late for the generation that are now becoming seniors, but must it be so forever?

 

[heypa]

There is no way for a young adult to prepare for the things your gov'ment and the Fed will do to you. I was born in 1926, out of college after the war,married and started my adult life in 1950.
No way could I prepare for what's coming let alone what has already happened. Just do the best you can with what you got and keep adjusting as you go along.
Oh! And don't live too long.
By the way. A stupid question not answered.

 

[Raystonn]

I voted no, but not for the reason given. Nothing in the Constitution gives the U.S. government the power to force pensions on an employer-employee relationship. Government-mandated healthcare is also unconstitutional in the U.S. for the same reason. If these things are really desired, then the legal method of obtaining them would be to pass a Constitutional amendment, as was done to both begin and end the Prohibition. At the very least, this drawn-out process would give me time to get the hell out of the new socialist "paradise" before I became trapped.

-Raystonn

 

[clacy]

Most people lack the discipline required to actually save enough for their retirement via 401k, IRA, Roth's, etc.

However, SS has morphed into a governmental pension plan, rather than the intened purpose of being a safety net.

If you're not disciplined enough to save, you might be forced to live a sub-par retirement or *gasp* have to work longer!!!

 

[nitro]

Quote from Raystonn:

I voted no, but not for the reason given. Nothing in the Constitution gives the U.S. government the power to force pensions on an employer-employee relationship. Government-mandated healthcare is also unconstitutional in the U.S. for the same reason. If these things are really desired, then the legal method of obtaining them would be to pass a Constitutional amendment, as was done to both begin and end the Prohibition. At the very least, this drawn-out process would give me time to get the hell out of the new socialist "paradise" before I became trapped.

-Raystonn

Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

http://www.law.cornell.edu/constitution/constitution.articlei.html

Perhaps you are referring to this:

Taxation can favor one industry or course of action over another, but a “tax” that falls exclusively on anyone who is uninsured is a penalty beyond Congress’s authority. If the rule were otherwise, Congress could evade all constitutional limits by “taxing” anyone who doesn’t follow an order of any kind—whether to obtain health-care insurance, or to join a health club, or exercise regularly, or even eat your vegetables.
. . .
Since the 1930s, the Supreme Court has been reluctant to invalidate “regulatory” taxes. However, a tax that is so clearly a penalty for failing to comply with requirements otherwise beyond Congress’s constitutional power will present the question whether there are any limits on Congress’s power to regulate individual Americans. The Supreme Court has never accepted such a proposition, and it is unlikely to accept it now, even in an area as important as health care.

http://blogs.wsj.com/law/2009/09/18/is-health-care-reform-unconstitutional-part-ii/

It is not unconstitutional to tax us collectively for whatever reason they please. What they spend the money on is what is in debate.

You are confusing the ends with the means.

 

[nitro]

Quote from clacy:

Most people lack the discipline required to actually save enough for their retirement via 401k, IRA, Roth's, etc.

However, SS has morphed into a governmental pension plan, rather than the intened purpose of being a safety net.

If you're not disciplined enough to save, you might be forced to live a sub-par retirement or *gasp* have to work longer!!!

Try getting a job today even being 20 years old and with a degree. Now try the same being 65 and haven't worked for five years.

http://redtape.msnbc.com/2009/05/in-her-words-graduate-struggles-under-mountain-of-debt.html

In Europe the situation is far worse.

I agree with you 100% that people have almost no discipline to save, but there are those that work to the bone and save, and still can't get a break when you take college for kids, gasoline prices, food costs, all the while wages deminishing.

 

[nitro]

No one ever talks about this, but this is the behind the scene issue that these people don't want to address:

http://www.vdare.com/Sailer/rove.htm

When the US needed cheap labor so they didn't have to mow their own lawn (http://www.leonapel.com/2007/08/19/should-michael-jordan-mow-his-own-lawn-economics-020/) or raise their own children instead having the mother go out and work, they granted amnesty to all these immigrants. Now, these people are having children here, they are Americans, but their parents don't have the mind to understand that they need to raise their children to live in America, not Mexico, or Bolivia, or Cuba. Hence, a huge population that think of themselves as Americans, but they have the skill sets of third world countries. So they have a hard time getting employment and getting ahead. You end up with 40M+ uninsured Americans.

Immigrants should be counseled. The problem is that there is no subtle way to do it. (Notice that many Asian and Oriental people, Indians, etc, come here to get educations and work hard at school. It is a cultural issue.)

Everyone was an immigrant at one time in America. Maybe there is always this vicious cycle, but it just seems worse now than ever.

 

[Random.Capital]

I have absolutely no idea what you're trying to say.

You want to get rid of 401ks? Or make them bigger? Expand Social Security? Curb immigration, or have more of it but with "counseling"?

What exactly is it you want?

(Not trying to pick a fight, honestly just can't figure out what you're asking for)

 

[nitro]

Quote from Random.Capital:

I have absolutely no idea what you're trying to say.

You want to get rid of 401ks? Or make them bigger? Expand Social Security? Curb immigration, or have more of it but with "counseling"?

What exactly is it you want?

(Not trying to pick a fight, honestly just can't figure out what you're asking for)

1) If it were up to me, I would raise taxes so that I could pay for universal health care. I would do this with a consumption tax.

2) As for saving for retirement, I would do a split system where companies would be forced to have pensions plans instead of employee matching of 401ks, and I would allow 20% of the rest of the check that gets taken out to be used for investing. Sort of the way older people are advised to invest in the markets, 80:20 bonds, stock, 80% pension, 20% 401K.

3) I don't want to curb immigration. This is the hardest question of all because we are all immigrants at one time. I just wish there was some way to integrate these people into American society, without being the Borg and assimilate them and destroy their culture. Mexicans are the hardest working people I have ever met in my life. If "they" had an education and worked half as hard, they would rule the world in no time.

"Blessed are the meek, for they will inherit the earth." - Mathew 5:5

 

[jprad]

Quote from Raystonn:

At the very least, this drawn-out process would give me time to get the hell out of the new socialist "paradise" before I became trapped.

The exit fee might be a tad more than you bargained for.