First, i love Bernie Sanders and i lean pretty left. This is not me exercising my inner conservative. As a guy who has logged almost 25 years as a grunt in a huge manufacturing plant I can say...
Exemplary
First, i love Bernie Sanders and i lean pretty left. This is not me exercising my inner conservative.
As a guy who has logged almost 25 years as a grunt in a huge manufacturing plant I can say unequivocally that I have a 401k and we are firmly entrenched in the lower middle class. I'm probably the posterchild for one of the people who is supposedly being hurt by these tax advantaged accounts.... mid 50s, high school education, hourly employee in a non union factory and live in the semi rural south. I am not wealthy by any metric. We live in a small house and lead a frugal lifestyle. We don't worry where our next meal is coming from but we aren't in the same stratosphere as "privileged ".
If I can have access to a 401k, there can't be that many who don't. I see quite a lot of people I work with who have never put a dime into their 401k. I see more who treated their 401k like a fishing boat fund. Those guys will pay the price later on. But thats on them. They all have access that they chose not to take. Maybe there is an argument for financial literacy education for less advantaged people. But at the end if the day how many people do I know that work jobs that don't offer them? Zero.
In the past 15 years my wife has worked at a giant retail chain whose initials are WM and had access to a 401. She worked as a part time vendor for a greeting card company and had access to a 401k. She worked in a door making facility that didn't have air conditioning, but she had access to a 401k. And now she us working an entry level job as a receptionist and has access to a 401k. Maybe this is me being naive but are there jobs anymore that aren't part time entry level jobs at fast food joints that don't offer access to 401k?
Admittedly I've never considered the tax money being missed out on by the government. But to paint retirement accounts like 401k's as elitist just seems to completely miss the mark.
I see you as privileged. My wife and I were kicked out at 17 and 18, had to raise family members as teens and as adults, and struggled with homelessness and food security through our 20s. Now we...
Exemplary
I see you as privileged. My wife and I were kicked out at 17 and 18, had to raise family members as teens and as adults, and struggled with homelessness and food security through our 20s. Now we have to pay off our debt, from the days when eating was a challenge, before it makes sense to put money in a 401K. We don't get employer matching.
It's a privileged position to be able to assume people aren't saving because they're not clever enough or can't delay gratification.
Edit: I don't mean to say you had it easy. I just don't think it's fair or kind to assume things about other people's situations in general. That's why I commented. That also means I want to make it clear that I respect your life and experience too. We all start in different places and have our own struggles to get where we end up.
Not disagreeing, but you focus a lot on employer-provided 401k accounts. You don't need your job to give you a 401k. They just pay the maintenance fees for you when it's offered - and if they're a...
Not disagreeing, but you focus a lot on employer-provided 401k accounts. You don't need your job to give you a 401k. They just pay the maintenance fees for you when it's offered - and if they're a great employer will give you free money with a match or just a straight up employer contribution.
Edit:
Whoops, realized that 401k is not the same thing as an IRA.
I'm just saying some of that article to me sounded like they were saying 401ks and IRAs were only accessible to high earning families. I just offered my family as a counterpoint. I focused on...
I'm just saying some of that article to me sounded like they were saying 401ks and IRAs were only accessible to high earning families.
I just offered my family as a counterpoint. I focused on 401ks because that's what I have first hand experience with. My company matches 100% of 3% and then 50% of the next 3%. And occasionally theyll dump in a lump sum on top of it if its been a strong year. We've done ok, especially considering how financially ignorant we were when we set it up 25 years ago.
I guess the argument is you need to have disposable income to contribute to a 401k. And these days that's limited to people well over the median income in most areas.
I guess the argument is you need to have disposable income to contribute to a 401k. And these days that's limited to people well over the median income in most areas.
The US has the second highest median disposable income in the world. That's just not true. People just spend to their heart's content on their credit card and then consider their disposable income...
The US has the second highest median disposable income in the world. That's just not true. People just spend to their heart's content on their credit card and then consider their disposable income to be everything that isn't on a bill...including the credit card bill.
And imagine where the economy would be if people did not spend everything they make. Your 401k would not be worth half of what it is if all that spending just disappeared. You can't have it both...
And imagine where the economy would be if people did not spend everything they make. Your 401k would not be worth half of what it is if all that spending just disappeared. You can't have it both ways.
I really dislike the argument that places the blame at people's feet for wanting to live a dignified life with a few pleasurable experiences. It strikes me as completely ignorant of so many different factors in lives that one couldn't possibly know anything about.
Imagine what inflation would be like if people spent a bit less, giving suppliers less leeway to raise prices? Yes, it can be overdone. When consumers change behavior it can cause a recession....
Imagine what inflation would be like if people spent a bit less, giving suppliers less leeway to raise prices?
Yes, it can be overdone. When consumers change behavior it can cause a recession. That's because it happens too quickly for the economy to adjust. A lot of businesses made decisions assuming consumers won't stop spending, and these can be absurdly specific assumptions about exactly what products people like to buy. During the pandemic there was even a temporary shortage of toilet paper, and one small factor was that the toilet paper that offices buy is a different product than the toilet paper that people use at home. The food that restaurants buy is often different from the food people buy at home, and so on.
This is an argument against sudden shocks where a lot of people change spending behavior all at once. A sudden run on toilet paper is bad.
But most of the time, you shouldn't care about this. If it's not part of a panic, you can do what's best for you and the economy isn't going to notice.
There are longer-term trends in consumer behaviors that will definitely be noticed, but that doesn't mean they're bad. The beef industry noticed when US consumers stopped eating as much meat. But this shouldn't be an argument against doing what's best for your health. If there were a major trend towards vegetarianism or towards buying fewer cars then businesses would have to change what they do, but that's not a bad change if it's gradual. The purpose of having businesses is to supply consumers with the goods and services they need. If consumers make better choices, businesses should adjust to that.
As an American who has been living abroad for ten years now, on three different continents, you have it exactly right. I live in Germany now, a high income country, and the people here survive on...
People just spend to their heart's content on their credit card and then consider their disposable income to be everything that isn't on a bill...including the credit card bill
As an American who has been living abroad for ten years now, on three different continents, you have it exactly right. I live in Germany now, a high income country, and the people here survive on much less than Americans do. The fact is that American standards of living are just unimaginably higher than most other countries in the world, even other first world countries. People in other places live their lives with much less than we do, smaller houses or apartments, less food waste, and far less spending on "things." Americans could save a lot more if they wanted to, it's just the hedonic treadmill in effect - people have always lived relatively extravagently and they can't imagine life without doing so.
I live in an 800 sqft apartment, to me this is a decent size for a single person who earns good money, it could definitely be a whole room smaller and it would be fine but any bigger would just be too much. My European friends come over and think my apartment is a rediculous size for a single person and most of them live in spaces half the size, to them that is completely normal and reasonable. They don't have all the electronic gadgets and modern conveniences Americans do and their refridgerators are tiny because they buy in much smaller quantities and actually eat all of what they purchase. The idea of what is reasonable to an American and most of the rest of the developed first-world are out of step with one another.
A lot of Ameriricans do struggle, and I mean really struggle, but those voices are always amplfiied online. The majority of Americans are still middle or upper classes and just have a problem with proper financial self-regulation
The average American doesn't go to college. Healthcare can be expensive, but the average American also isn't having a catastrophic health event every year. The ACA did a lot to improve medicaid...
The average American doesn't go to college. Healthcare can be expensive, but the average American also isn't having a catastrophic health event every year. The ACA did a lot to improve medicaid (except in states that didn't expand), so it's only some Americans in the middle that are underinsured.
401(k) is an employer-sponsored retirement fund, so you kind of do need your job to give you a 401(k)? I guess you can open a solo plan if you’re self-employed, but I don’t think that’s the...
401(k) is an employer-sponsored retirement fund, so you kind of do need your job to give you a 401(k)? I guess you can open a solo plan if you’re self-employed, but I don’t think that’s the scenario being discussed.
Note that if you're self-employed you can still contribute to a 401k contributing the same employer contribution and employee contribution, it's just that no one will match you. You can do this...
Note that if you're self-employed you can still contribute to a 401k contributing the same employer contribution and employee contribution, it's just that no one will match you. You can do this through places like Vanguard (what I use) or Fidelity.
I'm not sure however, if you're allowed to do this in the event that your employer doesn't provide you with one but you have an employment contract.
Also from the article: Are they implying that companies with pensions are where the fat cats are? Are far as I know pensions in the US are hard to come by and are mostly now found while working...
Also from the article:
The report observes that high-income individuals benefit disproportionately from tax-advantaged retirement accounts for several reasons, including because they're far more likely to work for organizations that "offer pensions plans and contribute to retirement savings accounts."
Are they implying that companies with pensions are where the fat cats are? Are far as I know pensions in the US are hard to come by and are mostly now found while working for local or Federal government, or some not-for-profit businesses. It's very rare to find a for-profit with a pension and most are phasing them out or have done so already.
Also, can anyone point me to where they define what a high income household is in terms of dollar amount? They kept throwing that term around but not explaining what they meant by it. AFAIK they might be defining it as greater than $77k HHI (i.e., greater than the median HHI) or as the top 1% of HHIs.
I think they should've led with the special retirement accounts for CEOs that regular employees can't access.
ETA: I just saw this on Hacker News about how private foundations are used as a major tax dodge. It was eye opening, as was the video linked to in the comments.
The only issue with having access to IRAs and 401ks is that politicians use the fact that they exist to argue for doing away with social security and doing away with the few remaining pension...
The only issue with having access to IRAs and 401ks is that politicians use the fact that they exist to argue for doing away with social security and doing away with the few remaining pension plans. IRAS and 401ks are great as long as they aren't the excuse for making things worse.
So because we don't have kids, we've managed to save that supposedly "high income" retirement amount with 40 years of work. But we're not millionaires, let alone billionaires. We had a close call...
So because we don't have kids, we've managed to save that supposedly "high income" retirement amount with 40 years of work. But we're not millionaires, let alone billionaires. We had a close call with medical expenses in the last couple of years that could have wiped out every dime and then some. Spouse will be involuntarily out of work at age 58 before the end of the year, I don't know how much longer I can keep going.
The reporting does a poor job of distinguishing life savings from the billionaire IRA tax dodge that lets them stash huge sums tax-free.
What the article is talking about, the paragraph about the $5M IRAs, etc is a loophole rich folks use to get money into those accounts tax free. They can do this because they own some sort of...
What the article is talking about, the paragraph about the $5M IRAs, etc is a loophole rich folks use to get money into those accounts tax free. They can do this because they own some sort of asset that doesn't have a real fair market value so they say "Hey these shares in some pre-ipo company are only worth a few thousand dollars, so I'm going to put them in my IRA since that is below the yearly contribution limit". A year later that company goes public and now those shares are with a few million dollars. Then they use the account as collateral against a loan which means they effectively got access to the funds without paying taxes.
Thank you for this explanation. This needed to be laid out in the article. I thought they were talking about profit sharing 401k plans or solo 401k plans.
Thank you for this explanation. This needed to be laid out in the article. I thought they were talking about profit sharing 401k plans or solo 401k plans.
It seems pretty intuitive that wealthier people have an easier time saving money. It also seems intuitive that wealthier people are more incentivized to fund 401ks since they reduce income that...
It seems pretty intuitive that wealthier people have an easier time saving money. It also seems intuitive that wealthier people are more incentivized to fund 401ks since they reduce income that would be taxed in higher brackets, compared to someone who pays tax at a low, or even zero rate.
That said, it’s not necessarily the “billionaires” benefiting because billionaires are saving way beyond what is allowable in 401ks annually. The people they are talking about are more your highly compensated corporate executives, doctors, some tech, etc.
I don’t know how to remove some of the regressive nature of that particular tax benefit without either lowering the annual contribution rates to what the median person would be able to contribute, or instituting an income threshold for contributing, like we have with normal IRAs. The second would be nearly impossible to implement because 401ks are run by employers who would have no way to know all of your personal income for the year.
It wouldn't remove the regressive nature of it, but if we really wanted to equalize the situation we'd find a realistic minimum living income for each area and then folks would get that for Social...
It wouldn't remove the regressive nature of it, but if we really wanted to equalize the situation we'd find a realistic minimum living income for each area and then folks would get that for Social Security. It would have to be recalculated each year rather than something Congress votes on.
The government is perfectly capable of doing this, they have the cost of living tables already set up for the DOD. That's moving in the direction of universal basic income, though.
What if someone moved to a high income area five years before retiring? Do they still get the higher amount? What if someone moved to a lower income area in say Florida before retiring? They would...
What if someone moved to a high income area five years before retiring? Do they still get the higher amount? What if someone moved to a lower income area in say Florida before retiring? They would have paid in higher amounts but now can only access lower tier levels of income?
Due to the freedom of movement, any such system would likely need to be federally run. Your compensation and contribution would shift based on home address. Still allows gaming the system but the...
Due to the freedom of movement, any such system would likely need to be federally run. Your compensation and contribution would shift based on home address. Still allows gaming the system but the entire nation would be supporting rather than just the locals.
I haven't been self employed for quite some time, but when I was I know I wasn't putting very much away for retirement. A company match when the company is you doesn't mean much. Maybe the bill...
I haven't been self employed for quite some time, but when I was I know I wasn't putting very much away for retirement. A company match when the company is you doesn't mean much. Maybe the bill they referenced helps with that, I'll have to look into it when I have time.
Does anyone know what's available for gig workers, part time employees, and contractors?
It means a ton. Maybe not at the 50th percentile of income, but at the 75th+ percentile, you can quickly end up being limited in the amount of money you can contribute to a 401k by the government...
A company match when the company is you doesn't mean much
It means a ton. Maybe not at the 50th percentile of income, but at the 75th+ percentile, you can quickly end up being limited in the amount of money you can contribute to a 401k by the government cap.
I'd personally love to be self-employed and give myself a 401k match up to the $66k current limit. (of course I have other considerations than 401k value)
The more money I can put away tax-free, the faster that money can grow, since the tax discount effectively compounds over time.
An IRA, which is always deductible no matter how much you make if you don't have a 401k available to you. If you have a 401k available, then an IRA might not be deductible if you make over a...
Does anyone know what's available for gig workers, part time employees, and contractors?
An IRA, which is always deductible no matter how much you make if you don't have a 401k available to you. If you have a 401k available, then an IRA might not be deductible if you make over a certain amount (phases out after $73k).
If you don't make enough to be in a higher tax bracket, a Roth IRA might be a better idea. It's not deductible, but the money and its growth isn't taxed like an IRA would be upon withdrawal.
An advantage of an IRA compared to most 401k plans is that you can do whatever the hell you want with it. Many 401k plans and only have a handful of mediocre funds with high fees that are good for the plan provider as opposed to the participant. But with an IRA, you can do whatever you want - individual stocks, ETFs, bonds, etc.
First, i love Bernie Sanders and i lean pretty left. This is not me exercising my inner conservative.
As a guy who has logged almost 25 years as a grunt in a huge manufacturing plant I can say unequivocally that I have a 401k and we are firmly entrenched in the lower middle class. I'm probably the posterchild for one of the people who is supposedly being hurt by these tax advantaged accounts.... mid 50s, high school education, hourly employee in a non union factory and live in the semi rural south. I am not wealthy by any metric. We live in a small house and lead a frugal lifestyle. We don't worry where our next meal is coming from but we aren't in the same stratosphere as "privileged ".
If I can have access to a 401k, there can't be that many who don't. I see quite a lot of people I work with who have never put a dime into their 401k. I see more who treated their 401k like a fishing boat fund. Those guys will pay the price later on. But thats on them. They all have access that they chose not to take. Maybe there is an argument for financial literacy education for less advantaged people. But at the end if the day how many people do I know that work jobs that don't offer them? Zero.
In the past 15 years my wife has worked at a giant retail chain whose initials are WM and had access to a 401. She worked as a part time vendor for a greeting card company and had access to a 401k. She worked in a door making facility that didn't have air conditioning, but she had access to a 401k. And now she us working an entry level job as a receptionist and has access to a 401k. Maybe this is me being naive but are there jobs anymore that aren't part time entry level jobs at fast food joints that don't offer access to 401k?
Admittedly I've never considered the tax money being missed out on by the government. But to paint retirement accounts like 401k's as elitist just seems to completely miss the mark.
I see you as privileged. My wife and I were kicked out at 17 and 18, had to raise family members as teens and as adults, and struggled with homelessness and food security through our 20s. Now we have to pay off our debt, from the days when eating was a challenge, before it makes sense to put money in a 401K. We don't get employer matching.
It's a privileged position to be able to assume people aren't saving because they're not clever enough or can't delay gratification.
Edit: I don't mean to say you had it easy. I just don't think it's fair or kind to assume things about other people's situations in general. That's why I commented. That also means I want to make it clear that I respect your life and experience too. We all start in different places and have our own struggles to get where we end up.
Reputable bankruptcy lawyers tend to give free consultations in the US. in case you want to explore that option.
Best of luck.
Not disagreeing, but you focus a lot on employer-provided 401k accounts. You don't need your job to give you a 401k. They just pay the maintenance fees for you when it's offered - and if they're a great employer will give you free money with a match or just a straight up employer contribution.
Edit:
Whoops, realized that 401k is not the same thing as an IRA.
I'm just saying some of that article to me sounded like they were saying 401ks and IRAs were only accessible to high earning families.
I just offered my family as a counterpoint. I focused on 401ks because that's what I have first hand experience with. My company matches 100% of 3% and then 50% of the next 3%. And occasionally theyll dump in a lump sum on top of it if its been a strong year. We've done ok, especially considering how financially ignorant we were when we set it up 25 years ago.
I guess the argument is you need to have disposable income to contribute to a 401k. And these days that's limited to people well over the median income in most areas.
The US has the second highest median disposable income in the world. That's just not true. People just spend to their heart's content on their credit card and then consider their disposable income to be everything that isn't on a bill...including the credit card bill.
And imagine where the economy would be if people did not spend everything they make. Your 401k would not be worth half of what it is if all that spending just disappeared. You can't have it both ways.
I really dislike the argument that places the blame at people's feet for wanting to live a dignified life with a few pleasurable experiences. It strikes me as completely ignorant of so many different factors in lives that one couldn't possibly know anything about.
Imagine what inflation would be like if people spent a bit less, giving suppliers less leeway to raise prices?
Yes, it can be overdone. When consumers change behavior it can cause a recession. That's because it happens too quickly for the economy to adjust. A lot of businesses made decisions assuming consumers won't stop spending, and these can be absurdly specific assumptions about exactly what products people like to buy. During the pandemic there was even a temporary shortage of toilet paper, and one small factor was that the toilet paper that offices buy is a different product than the toilet paper that people use at home. The food that restaurants buy is often different from the food people buy at home, and so on.
This is an argument against sudden shocks where a lot of people change spending behavior all at once. A sudden run on toilet paper is bad.
But most of the time, you shouldn't care about this. If it's not part of a panic, you can do what's best for you and the economy isn't going to notice.
There are longer-term trends in consumer behaviors that will definitely be noticed, but that doesn't mean they're bad. The beef industry noticed when US consumers stopped eating as much meat. But this shouldn't be an argument against doing what's best for your health. If there were a major trend towards vegetarianism or towards buying fewer cars then businesses would have to change what they do, but that's not a bad change if it's gradual. The purpose of having businesses is to supply consumers with the goods and services they need. If consumers make better choices, businesses should adjust to that.
As an American who has been living abroad for ten years now, on three different continents, you have it exactly right. I live in Germany now, a high income country, and the people here survive on much less than Americans do. The fact is that American standards of living are just unimaginably higher than most other countries in the world, even other first world countries. People in other places live their lives with much less than we do, smaller houses or apartments, less food waste, and far less spending on "things." Americans could save a lot more if they wanted to, it's just the hedonic treadmill in effect - people have always lived relatively extravagently and they can't imagine life without doing so.
I live in an 800 sqft apartment, to me this is a decent size for a single person who earns good money, it could definitely be a whole room smaller and it would be fine but any bigger would just be too much. My European friends come over and think my apartment is a rediculous size for a single person and most of them live in spaces half the size, to them that is completely normal and reasonable. They don't have all the electronic gadgets and modern conveniences Americans do and their refridgerators are tiny because they buy in much smaller quantities and actually eat all of what they purchase. The idea of what is reasonable to an American and most of the rest of the developed first-world are out of step with one another.
A lot of Ameriricans do struggle, and I mean really struggle, but those voices are always amplfiied online. The majority of Americans are still middle or upper classes and just have a problem with proper financial self-regulation
We also pay far more for healthcare and education in the US. That median disposable income is illusory. It's not really that disposable.
The average American doesn't go to college. Healthcare can be expensive, but the average American also isn't having a catastrophic health event every year. The ACA did a lot to improve medicaid (except in states that didn't expand), so it's only some Americans in the middle that are underinsured.
401(k) is an employer-sponsored retirement fund, so you kind of do need your job to give you a 401(k)? I guess you can open a solo plan if you’re self-employed, but I don’t think that’s the scenario being discussed.
What am I missing?
Note that if you're self-employed you can still contribute to a 401k contributing the same employer contribution and employee contribution, it's just that no one will match you. You can do this through places like Vanguard (what I use) or Fidelity.
I'm not sure however, if you're allowed to do this in the event that your employer doesn't provide you with one but you have an employment contract.
I think I made the mistake of confusing 401k and IRA.
Ahh. Right on, I see you’ve edited your comment.
Also from the article:
Are they implying that companies with pensions are where the fat cats are? Are far as I know pensions in the US are hard to come by and are mostly now found while working for local or Federal government, or some not-for-profit businesses. It's very rare to find a for-profit with a pension and most are phasing them out or have done so already.
Also, can anyone point me to where they define what a high income household is in terms of dollar amount? They kept throwing that term around but not explaining what they meant by it. AFAIK they might be defining it as greater than $77k HHI (i.e., greater than the median HHI) or as the top 1% of HHIs.
I think they should've led with the special retirement accounts for CEOs that regular employees can't access.
ETA: I just saw this on Hacker News about how private foundations are used as a major tax dodge. It was eye opening, as was the video linked to in the comments.
I'm sad that my first thought was WaMu.
What's the fuzz with WaMu?
Well Walmart's initials are just W, so that makes sense.
The only issue with having access to IRAs and 401ks is that politicians use the fact that they exist to argue for doing away with social security and doing away with the few remaining pension plans. IRAS and 401ks are great as long as they aren't the excuse for making things worse.
That's fair.
So because we don't have kids, we've managed to save that supposedly "high income" retirement amount with 40 years of work. But we're not millionaires, let alone billionaires. We had a close call with medical expenses in the last couple of years that could have wiped out every dime and then some. Spouse will be involuntarily out of work at age 58 before the end of the year, I don't know how much longer I can keep going.
The reporting does a poor job of distinguishing life savings from the billionaire IRA tax dodge that lets them stash huge sums tax-free.
What the article is talking about, the paragraph about the $5M IRAs, etc is a loophole rich folks use to get money into those accounts tax free. They can do this because they own some sort of asset that doesn't have a real fair market value so they say "Hey these shares in some pre-ipo company are only worth a few thousand dollars, so I'm going to put them in my IRA since that is below the yearly contribution limit". A year later that company goes public and now those shares are with a few million dollars. Then they use the account as collateral against a loan which means they effectively got access to the funds without paying taxes.
c.f. Peter Thiel's 5 billion dollar IRA which contains many pre-ipo shares of palantir, stripe, Facebook, and others.
When I read that there were only 29,000 of these people in the whole country (of 330 million people), the article lost all credibility to me.
Thank you for this explanation. This needed to be laid out in the article. I thought they were talking about profit sharing 401k plans or solo 401k plans.
It seems pretty intuitive that wealthier people have an easier time saving money. It also seems intuitive that wealthier people are more incentivized to fund 401ks since they reduce income that would be taxed in higher brackets, compared to someone who pays tax at a low, or even zero rate.
That said, it’s not necessarily the “billionaires” benefiting because billionaires are saving way beyond what is allowable in 401ks annually. The people they are talking about are more your highly compensated corporate executives, doctors, some tech, etc.
I don’t know how to remove some of the regressive nature of that particular tax benefit without either lowering the annual contribution rates to what the median person would be able to contribute, or instituting an income threshold for contributing, like we have with normal IRAs. The second would be nearly impossible to implement because 401ks are run by employers who would have no way to know all of your personal income for the year.
It wouldn't remove the regressive nature of it, but if we really wanted to equalize the situation we'd find a realistic minimum living income for each area and then folks would get that for Social Security. It would have to be recalculated each year rather than something Congress votes on.
The government is perfectly capable of doing this, they have the cost of living tables already set up for the DOD. That's moving in the direction of universal basic income, though.
What if someone moved to a high income area five years before retiring? Do they still get the higher amount? What if someone moved to a lower income area in say Florida before retiring? They would have paid in higher amounts but now can only access lower tier levels of income?
Due to the freedom of movement, any such system would likely need to be federally run. Your compensation and contribution would shift based on home address. Still allows gaming the system but the entire nation would be supporting rather than just the locals.
I haven't been self employed for quite some time, but when I was I know I wasn't putting very much away for retirement. A company match when the company is you doesn't mean much. Maybe the bill they referenced helps with that, I'll have to look into it when I have time.
Does anyone know what's available for gig workers, part time employees, and contractors?
It means a ton. Maybe not at the 50th percentile of income, but at the 75th+ percentile, you can quickly end up being limited in the amount of money you can contribute to a 401k by the government cap.
I'd personally love to be self-employed and give myself a 401k match up to the $66k current limit. (of course I have other considerations than 401k value)
The more money I can put away tax-free, the faster that money can grow, since the tax discount effectively compounds over time.
An IRA, which is always deductible no matter how much you make if you don't have a 401k available to you. If you have a 401k available, then an IRA might not be deductible if you make over a certain amount (phases out after $73k).
If you don't make enough to be in a higher tax bracket, a Roth IRA might be a better idea. It's not deductible, but the money and its growth isn't taxed like an IRA would be upon withdrawal.
An advantage of an IRA compared to most 401k plans is that you can do whatever the hell you want with it. Many 401k plans and only have a handful of mediocre funds with high fees that are good for the plan provider as opposed to the participant. But with an IRA, you can do whatever you want - individual stocks, ETFs, bonds, etc.