401(k)s Will Be Gone Within a Decade

[Harpy Eagle]

401(k)s Will Be Gone Within a Decade

The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.

www.wealthmanagement.com

Had this link in a retirement related email I get weekly. I found it pretty interesting ..

If you are among the 56% of US workers with a retirement plan, I have some bad news for you: Your 401(k) will be gone in 10 years, tops. Not the money, thank goodness — Americans have trillions of dollars in these accounts, and there is an entire industry built around them — but the plans themselves.

I have been seeing more and more about this lately...and it all comes down to the Govt and money....


There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?

The 401(k) is not tax-free but what is known as tax-advantaged. Contributions made while working are not taxed, but participants pay taxes when they withdraw the money during retirement. Whether there is a big tax savings depends on the tax rate in retirement — which is usually lower because retirees tend to have lower earnings. Savers also avoid capital gains taxes on returns.

All of this cost the government an estimated $185 billion in 2019, or 0.9% of GDP. That’s not nothing. And in theory it’s justifiable because it creates a powerful incentive to save for retirement. More retirement savings have a triple benefit: for the economy overall, since they fuel growth; for the government, since retirees with income are less likely to be a burden on the state; and, of course, for workers who might not save enough today and regret it later.

Then again, maybe not. The first rumblings that the benefits of the tax breaks may be overstated came in a 2014 study of Danish savers. Without tax-advantaged accounts, it found, people just put their money in another kind of account. People did save more in retirement accounts, but that’s mostly because of automatic paycheck deduction. Subsequent research in other countries found similar results. Not only did the tax incentive fail to encourage more saving; the biggest beneficiaries tended to be the wealthy.
One alternative...

Enter the employer-sponsored liquid account. Like a retirement account, it is funded by payroll deductions, but unlike a 401(k), it allows employees to withdraw money without a penalty when needed. As these accounts grow in popularity, they may displace the 401(k). More liquid accounts, similar to a Roth IRA, have been become popular in Canada, and Canadians are saving more in them than in the tax-advantaged retirement accounts.

 

[Votto]

401(k)s Will Be Gone Within a Decade

The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.

www.wealthmanagement.com

Had this link in a retirement related email I get weekly. I found it pretty interesting ..

If you are among the 56% of US workers with a retirement plan, I have some bad news for you: Your 401(k) will be gone in 10 years, tops. Not the money, thank goodness — Americans have trillions of dollars in these accounts, and there is an entire industry built around them — but the plans themselves.

I have been seeing more and more about this lately...and it all comes down to the Govt and money....


There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?

The 401(k) is not tax-free but what is known as tax-advantaged. Contributions made while working are not taxed, but participants pay taxes when they withdraw the money during retirement. Whether there is a big tax savings depends on the tax rate in retirement — which is usually lower because retirees tend to have lower earnings. Savers also avoid capital gains taxes on returns.

All of this cost the government an estimated $185 billion in 2019, or 0.9% of GDP. That’s not nothing. And in theory it’s justifiable because it creates a powerful incentive to save for retirement. More retirement savings have a triple benefit: for the economy overall, since they fuel growth; for the government, since retirees with income are less likely to be a burden on the state; and, of course, for workers who might not save enough today and regret it later.

Then again, maybe not. The first rumblings that the benefits of the tax breaks may be overstated came in a 2014 study of Danish savers. Without tax-advantaged accounts, it found, people just put their money in another kind of account. People did save more in retirement accounts, but that’s mostly because of automatic paycheck deduction. Subsequent research in other countries found similar results. Not only did the tax incentive fail to encourage more saving; the biggest beneficiaries tended to be the wealthy.
One alternative...

Enter the employer-sponsored liquid account. Like a retirement account, it is funded by payroll deductions, but unlike a 401(k), it allows employees to withdraw money without a penalty when needed. As these accounts grow in popularity, they may displace the 401(k). More liquid accounts, similar to a Roth IRA, have been become popular in Canada, and Canadians are saving more in them than in the tax-advantaged retirement accounts.

The cancer will always go to the nearest blood supply until it kills the host entirely.

It is only a matter of time.

 

[alang1216]

401(k)s Will Be Gone Within a Decade

The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.

www.wealthmanagement.com

Had this link in a retirement related email I get weekly. I found it pretty interesting ..

If you are among the 56% of US workers with a retirement plan, I have some bad news for you: Your 401(k) will be gone in 10 years, tops. Not the money, thank goodness — Americans have trillions of dollars in these accounts, and there is an entire industry built around them — but the plans themselves.

I have been seeing more and more about this lately...and it all comes down to the Govt and money....


There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?

The 401(k) is not tax-free but what is known as tax-advantaged. Contributions made while working are not taxed, but participants pay taxes when they withdraw the money during retirement. Whether there is a big tax savings depends on the tax rate in retirement — which is usually lower because retirees tend to have lower earnings. Savers also avoid capital gains taxes on returns.

All of this cost the government an estimated $185 billion in 2019, or 0.9% of GDP. That’s not nothing. And in theory it’s justifiable because it creates a powerful incentive to save for retirement. More retirement savings have a triple benefit: for the economy overall, since they fuel growth; for the government, since retirees with income are less likely to be a burden on the state; and, of course, for workers who might not save enough today and regret it later.

Then again, maybe not. The first rumblings that the benefits of the tax breaks may be overstated came in a 2014 study of Danish savers. Without tax-advantaged accounts, it found, people just put their money in another kind of account. People did save more in retirement accounts, but that’s mostly because of automatic paycheck deduction. Subsequent research in other countries found similar results. Not only did the tax incentive fail to encourage more saving; the biggest beneficiaries tended to be the wealthy.
One alternative...

Enter the employer-sponsored liquid account. Like a retirement account, it is funded by payroll deductions, but unlike a 401(k), it allows employees to withdraw money without a penalty when needed. As these accounts grow in popularity, they may displace the 401(k). More liquid accounts, similar to a Roth IRA, have been become popular in Canada, and Canadians are saving more in them than in the tax-advantaged retirement accounts.

I knew a man who ran a business setting up retirement plans for small businesses. When he started he made the contributions voluntary. Even though a percentage was matched by the employer, few employees took advantage of the plan and essentially passed on significant free money offered by their employee. In America we live for today, we trust tomorrow will take care of itself. Dumb. I think retirement plans have to be mandatory or we'll end up with a lot of the elderly trying to live on Social Security.

 

[Harpy Eagle]

I knew a man who ran a business setting up retirement plans for small businesses. When he started he made the contributions voluntary. Even though a percentage was matched by the employer, few employees took advantage of the plan and essentially passed on significant free money offered by their employee. In America we live for today, we trust tomorrow will take care of itself. Dumb. I think retirement plans have to be mandatory or we'll end up with a lot of the elderly trying to live on Social Security.

In Illinois you have to optout of having money put into a company 401k otherwise it is done automatically.

I am not fond of the Govt saving us from ourselves, but I sort of like this system.

 

[1srelluc]

I knew a man who ran a business setting up retirement plans for small businesses. When he started he made the contributions voluntary. Even though a percentage was matched by the employer, few employees took advantage of the plan and essentially passed on significant free money offered by their employee. In America we live for today, we trust tomorrow will take care of itself. Dumb. I think retirement plans have to be mandatory or we'll end up with a lot of the elderly trying to live on Social Security.

I'm calling BS....Back when I worked for Dupont everyone was maxing out. Nobody was gonna give-up free money......Virginia did not raise fools. I bet better than half had a Roth too when they were made available in the late 90s.

Personnel hated when we got a raise because everyone would up their contributions. Back then there was paperwork involved, I suspect it's more automated today.

Sigh, that said back then the economy was such that you could make ends meet on a blue collar income while owning a home and raising a family and you could still salt money away at a pretty good clip and even play the market a bit.....Unless you fucked-up and got divorced....I saw that happen a lot too....They really got fucked.

 

[sealybobo]

401(k)s Will Be Gone Within a Decade

The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.

www.wealthmanagement.com

Had this link in a retirement related email I get weekly. I found it pretty interesting ..

If you are among the 56% of US workers with a retirement plan, I have some bad news for you: Your 401(k) will be gone in 10 years, tops. Not the money, thank goodness — Americans have trillions of dollars in these accounts, and there is an entire industry built around them — but the plans themselves.

I have been seeing more and more about this lately...and it all comes down to the Govt and money....


There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?

The 401(k) is not tax-free but what is known as tax-advantaged. Contributions made while working are not taxed, but participants pay taxes when they withdraw the money during retirement. Whether there is a big tax savings depends on the tax rate in retirement — which is usually lower because retirees tend to have lower earnings. Savers also avoid capital gains taxes on returns.

All of this cost the government an estimated $185 billion in 2019, or 0.9% of GDP. That’s not nothing. And in theory it’s justifiable because it creates a powerful incentive to save for retirement. More retirement savings have a triple benefit: for the economy overall, since they fuel growth; for the government, since retirees with income are less likely to be a burden on the state; and, of course, for workers who might not save enough today and regret it later.

Then again, maybe not. The first rumblings that the benefits of the tax breaks may be overstated came in a 2014 study of Danish savers. Without tax-advantaged accounts, it found, people just put their money in another kind of account. People did save more in retirement accounts, but that’s mostly because of automatic paycheck deduction. Subsequent research in other countries found similar results. Not only did the tax incentive fail to encourage more saving; the biggest beneficiaries tended to be the wealthy.
One alternative...

Enter the employer-sponsored liquid account. Like a retirement account, it is funded by payroll deductions, but unlike a 401(k), it allows employees to withdraw money without a penalty when needed. As these accounts grow in popularity, they may displace the 401(k). More liquid accounts, similar to a Roth IRA, have been become popular in Canada, and Canadians are saving more in them than in the tax-advantaged retirement accounts.

I'm 53. at 59.5 I'm going to move my money into a 4% (god willing) government secured savings. Even 1%. But it won't go down. I just need to keep making 10% for the next 6 years. Maybe at age 60 I'll take some and put it on the stock market but the majority of it will be safe.

Best case scenario my dad leaves me $400K and my nephews are rich. Or they will be so I have no need to worry about how much money I leave to them. So I could have $1.5 MILLION. Let's say they cut my social security 25% so I make $1500 a month instead of $2000. I could spend $68,000 a year for 30 years. No way I'll live to be 90.

I think I'll be alright but I will be pissed too and I'll be even more upset when Republicans blame Democrats.

 

[Harpy Eagle]

I'm 53. at 59.5 I'm going to move my money into a 4% (god willing) government secured savings. Even 1%. But it won't go down. I just need to keep making 10% for the next 6 years. Maybe at age 60 I'll take some and put it on the stock market but the majority of it will be safe.

at 59.5 I moved all my 401k (well all but 5K) into a IRA with my investment broker. When I retire in 5 years I will put the rest in there. This gives me more control and 1000 times more choices as to where to put the money.

We will be able to live off our just our pensions, SS and other savings/investment accounts. Our goal is to not touch the IRA till we are forced to except for maybe major trips that are out of the norm. It will not be used for living expenses. Thus we are more willing to take risk as the rewards are worth it.

 

[alang1216]

I'm calling BS....Back when I worked for Dupont everyone was maxing out. Nobody was gonna give-up free money......Virginia did not raise fools. I bet better than half had a Roth too when they were made available in the late 90s.

You can believe it or not, I'm just repeating what I was told and he had no reason to lie to me.

Sigh, that said back then the economy was such that you could make ends meet on a blue collar income while owning a home and raising a family and you could still salt money away at a pretty good clip and even play the market a bit.....

I think a lot of that had to do with unions building the Middle Class. Ancient history.

 

[alang1216]

In Illinois you have to optout of having money put into a company 401k otherwise it is done automatically.

I am not fond of the Govt saving us from ourselves, but I sort of like this system.

It is why we created social security, for whatever reason, in the Great Depression elderly people didn't any savings.

 

[Dont Taz Me Bro]

My employer will match up to 4% of my salary in contributions to my 401K, so that is what I put into it. I also have my own stock portfolios with Fidelity and Schwab that I manage on my own.

 

[sealybobo]

at 59.5 I moved all my 401k (well all but 5K) into a IRA with my investment broker. When I retire in 5 years I will put the rest in there. This gives me more control and 1000 times more choices as to where to put the money.

We will be able to live off our just or pensions, SS and other savings/investment accounts. Our goal is to not touch the IRA till we are forced to except for maybe major trips that are out of the norm. It will not be used for living expenses. Thus we are more willing to take risk as the rewards are worth it.

I had this rollover 401K I invested years ago. I was recently reminded that half of it is an annuity.

Based on current average payouts, a 60-year-old male who purchases a $100,000 immediate annuity with a lifetime payout can expect to receive approximately $627 per month.

Kind of cool I'll be getting $600 bucks a month for life on that one thing. So even with just social security and that, even if Republican cut my social security 25%, will be $2100 a month. I can live on that now. Barely but I can.

Then I should have another $900K at least. Let's say I make an extra $27,000 on that a year at 3%. That's $50K to live on without touching the $900K.

I REALLY don't want to spend the money I save. I want to just live off the interest and social security.

BUT, I will spend $200K on a condo in Florida eventually. Fuck winters in Michigan. My family tells me I should get one now because now they are only $100K. But then I will have $6000 a year in bills for the next 10 years. Fuck that. I need to save that money not buy a condo.

I'm lucky. My brother has a hunting property up north, a condo in Florida and a place in Greece. So free room and board wherever I go. LOL

 

[1srelluc]

I think a lot of that had to do with unions building the Middle Class. Ancient history.

We were not union and were actually paid a good bit more than the employees at our sister union-run plants.....In fact after about ten years all we had supervision-wise was a 1st line shift supervisor (oversaw all departments) and that was it.

Perhaps that's why they all closed and we went to their plants and dismantled their machinery that was still good, crated it up, and took it to our plant and expanded.

I worked for Dupont's Automotive & Industrial Finishes.....You know, we sponsored Jeff Gordon's 24 car back in the day.

Finally (I had retired) Dupont sold their Finishes Division to Axalta Coating Systems.....They are still a paint provider and part time sponsor for NASCAR.

 

[sealybobo]

at 59.5 I moved all my 401k (well all but 5K) into a IRA with my investment broker. When I retire in 5 years I will put the rest in there. This gives me more control and 1000 times more choices as to where to put the money.

We will be able to live off our just our pensions, SS and other savings/investment accounts. Our goal is to not touch the IRA till we are forced to except for maybe major trips that are out of the norm. It will not be used for living expenses. Thus we are more willing to take risk as the rewards are worth it.

I'm serious. I'm really nervous about retirement even though I should be fine no matter what. Even if it means I eat up every dime, I'll be fine. And my nephews will have/make more than I ever will. So I really don't have to worry about them.

What about most people who are going to rely even more on SS than me? I see old people working in their 70's at the supermarket. It ain't because they want to.

I hope to have 1.4 million but what if the market tanks? Even though Clinton did great, idiot Americans elected Bush/Republicans who destroyed union/manufacuting high paying blue collar jobs. I live in Michigan. Then Obama got us out of Bush's mess. I started saving again, then Bush started a trade war with China and it slowed sales in 2019. Luckily it didn't ruin Michigan like Bush did, but it sure did slow the economy down.

Obama had slow steady growth. Biden too. Adding jobs month after month. It seems like each of them has to step in and clean up the mess Bush/Bush/Trump left behind.

Gore should have been president. Hillary too.

 

[Harpy Eagle]

I'm serious. I'm really nervous about retirement even though I should be fine no matter what. Even if it means I eat up every dime, I'll be fine. And my nephews will have/make more than I ever will. So I really don't have to worry about them.

What about most people who are going to rely even more on SS than me? I see old people working in their 70's at the supermarket. It ain't because they want to.

I understand what you are saying. If not for guaranteed pensions we would probably have to wait at least 5 years longer than our current plan to feel comfortable with full retirement.

 

[sealybobo]

I understand what you are saying. If not for guaranteed pensions we would probably have to wait at least 5 years longer than our current plan to feel comfortable with full retirement.

I shouldn't wish my life away. Be happy being 53 and I make good money. I survived the Bush years I think I can survive another horrible 10 years if it happens again. Even if the economy tanked tomorrow for 10 years and eventually came back, I'll have "enough" to retire at 65. Most people could retire at 62 but we don't get medicare till 65 so we are forced to work another 3 years. How many people would retire at 62 if you also got medicare? A LOT.

And I do seriously worry about a Republican being president. Bush and Trump were not good to Michigan. We didn't vote for Trump so he didn't care that he ruined the great manufacturing economy that was happening when he started his trade war with China. He only had 2.2% gdp in 2019 because of that trade war and Michigan felt it.

Republicans argued we would have to take it because eventually they want EVERYTHING made in America, which now isn't realistic and disrupted business. And they don't do anything diplomatically. Trump does reckless things that could come back to bite us all in the ass. He thinks he's a genious but isn't he broke? Can't even pay the $ he owes in court cases. I thought he was a billionaire. Oh yea, he over inflated his wealth. Got charged for it too. So he did it criminally.

 

[Harpy Eagle]

I shouldn't wish my life away. Be happy being 53 and I make good money. I survived the Bush years I think I can survive another horrible 10 years if it happens again. Even if the economy tanked tomorrow for 10 years and eventually came back, I'll have "enough" to retire at 65. Most people could retire at 62 but we don't get medicare till 65 so we are forced to work another 3 years. How many people would retire at 62 if you also got medicare? A LOT.

And I do seriously worry about a Republican being president. Bush and Trump were not good to Michigan. We didn't vote for Trump so he didn't care that he ruined the great manufacturing economy that was happening when he started his trade war with China. He only had 2.2% gdp in 2019 because of that trade war and Michigan felt it.

Republicans argued we would have to take it because eventually they want EVERYTHING made in America, which now isn't realistic and disrupted business. And they don't do anything diplomatically. Trump does reckless things that could come back to bite us all in the ass. He thinks he's a genious but isn't he broke? Can't even pay the $ he owes in court cases. I thought he was a billionaire. Oh yea, he over inflated his wealth. Got charged for it too. So he did it criminally.

Yep, regrets and wishes are not helpful. A decade ago my "retirement savings" were basically non-existent. Looking back I wish of course we had started sooner, but also a one salary military family is not really brining home the big bucks. My 29 year old has been putting money away for retirement since she was 26, she learned from our mistakes.

But no regrets and being able to fully retire at 65 and be brining in more than the national average of those working, I have nothing to bitch about.

 

[sealybobo]

Yep, regrets and wishes are not helpful. A decade ago my "retirement savings" were basically non-existent. Looking back I wish of course we had started sooner, but also a one salary military family is not really brining home the big bucks. My 29 year old has been putting money away for retirement since she was 26, she learned from our mistakes.

But no regrets and being able to fully retire at 65 and be brining in more than the national average of those working, I have nothing to bitch about.

My dad admits if he knew he was going to get a 30 year pension he wouldn't have worried about saving. But the contracts were up every 4 years. He only made 20 years. Enough to get a pension but not a big one. He took the buy out $125,000. I think he's going to live long enough he should have kept the pension but that's fine. He's like you. Maybe not as much as you but he brings in more than he spends every month so that's all that matters.

I love when he cries about damaging his car or car insurance. He has so much money I remind him I don't really feel sorry for him. Be more careful but it's not like you can't afford the higher insurance rates.

He says if I was rich like my brother he'd go to an expensive home. I tell him to go. My brother tells me he complains I'm trying to put him in a home. LOL. So he doesn't really want to go to a home. I think it'd be good for him because he lives alone. But an expensive retirement home could eat up my half which right now is probably $400K.

So I don't count on that money or social security. Maybe I'm counting on social security at least paying me $1000 a month. They better do at least that or I'm going to storm the capitol. LOL

If they just give me medicare and $1000 a month, I'll survive. I may eat into my life savings but so what right? I'd like to leave it to my nephews but they won't need it. Both go to MSU ones going to be a lawyer. Getting acceptance letters from 4 or 5 law schools already. Not Harvard but some good ones. And he has connections. Privilege.

 

[odanny]

I see old people working in their 70's at the supermarket. It ain't because they want to.

Not necessarily true, I retired at 56.5, im
57.5 now and considered a part time job a lot recently as I have too much time on my hands, but on the flip side, I’ve been traveling since March 1st and being on a schedule would not work for me, even part time, so I just volunteer when I’m home.

Most people don’t travel and they may find themselves bored, you don’t have to be broke to be working at 70, just bored.

 

[odanny]

401(k)s Will Be Gone Within a Decade

The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.

www.wealthmanagement.com

Had this link in a retirement related email I get weekly. I found it pretty interesting ..

If you are among the 56% of US workers with a retirement plan, I have some bad news for you: Your 401(k) will be gone in 10 years, tops. Not the money, thank goodness — Americans have trillions of dollars in these accounts, and there is an entire industry built around them — but the plans themselves.

I have been seeing more and more about this lately...and it all comes down to the Govt and money....


There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?

The 401(k) is not tax-free but what is known as tax-advantaged. Contributions made while working are not taxed, but participants pay taxes when they withdraw the money during retirement. Whether there is a big tax savings depends on the tax rate in retirement — which is usually lower because retirees tend to have lower earnings. Savers also avoid capital gains taxes on returns.

All of this cost the government an estimated $185 billion in 2019, or 0.9% of GDP. That’s not nothing. And in theory it’s justifiable because it creates a powerful incentive to save for retirement. More retirement savings have a triple benefit: for the economy overall, since they fuel growth; for the government, since retirees with income are less likely to be a burden on the state; and, of course, for workers who might not save enough today and regret it later.

Then again, maybe not. The first rumblings that the benefits of the tax breaks may be overstated came in a 2014 study of Danish savers. Without tax-advantaged accounts, it found, people just put their money in another kind of account. People did save more in retirement accounts, but that’s mostly because of automatic paycheck deduction. Subsequent research in other countries found similar results. Not only did the tax incentive fail to encourage more saving; the biggest beneficiaries tended to be the wealthy.
One alternative...

Enter the employer-sponsored liquid account. Like a retirement account, it is funded by payroll deductions, but unlike a 401(k), it allows employees to withdraw money without a penalty when needed. As these accounts grow in popularity, they may displace the 401(k). More liquid accounts, similar to a Roth IRA, have been become popular in Canada, and Canadians are saving more in them than in the tax-advantaged retirement accounts.

Any type of retirement plan that allows withdrawals before 59.5 that are not penalized is a terrible idea, we like to think that people will have the discipline to not touch their money till retirement and that is a myth, most will use their retirement savings like a checking account, which will effectively kill any appreciable gains. Many times I would have withdrawn money out of my account to pay off things and im extremely fortunate I could not do it without a penalty, the only time I could make a withdrawal from my account without penalty was the height of Covid, when they allowed penalty free withdrawals, coworkers took out money when their balances were way down, effectively doubling their financial harm. When I decided to take out some money the recovery was well underway and my 401K was up 36% when I took my first of two withdrawals. For me it was free money, for those down 25% due to the market crash of Covid, they sacrificed their future for quick money now.

 

[Harpy Eagle]

Any type of retirement plan that allows withdrawals before 59.5 that are not penalized is a terrible idea, we like to think that people will have the discipline to not touch their money till retirement and that is a myth, most will use their retirement savings like a checking account, which will effectively kill any appreciable gains. Many times I would have withdrawn money out of my account to pay off things and im extremely fortunate I could not do it without a penalty, the only time I could make a withdrawal from my account without penalty was the height of Covid, when they allowed penalty free withdrawals, coworkers took out money when their balances were way down, effectively doubling their financial harm. When I decided to take out some money the recovery was well underway and my 401K was up 36% when I took my first of two withdrawals. For me it was free money, for those down 25% due to the market crash of Covid, they sacrificed their future for quick money now.

I get what you are saying, but I struggle with the idea it is the Govt's job to keep us safe from ourselves.