Will Republicans end social security?

[Dr.Know]

The Republicans scare people into saying the Democrats will take their guns.

The Democrats scare people into saying the Republicans are going to take Social Security.

They have been using these 2 tricks for 70 years

 

[Red Front]

The Republicans scare people into saying the Democrats will take their guns.

The Democrats scare people into saying the Republicans are going to take Social Security.

They have been using these 2 tricks for 70 years

Interesting point.

 

[kyzr]

On the notion of taxation, borrowing, and printing money, the most important takeaway here is that for a country like the United States, which issues its own currency, these mechanisms operate differently than they would for a business or a household.

1. Raising taxes: While it's often said that tax increases remove money from the economy, it is more accurate to say that they shift money within the economy. Taxes collected by the government are often spent on programs and services that directly contribute to the economy. Thus, taxation serves to redistribute income, curb excessive inflation, and to make necessary adjustments for societal equity.
2. Issuing bonds: The issuance of bonds isn’t a fiscal necessity for the government, rather it’s a monetary policy tool. The government doesn't need to borrow its own currency. Bonds offer investors a safe place to store their wealth and help manage interest rates.
3. Printing money: As you mentioned, this mechanism has the potential to induce inflation if mismanaged. But it's not the act of printing money itself that causes inflation. Rather, inflation occurs when the total demand for goods and services exceeds the economy's ability to provide them. In this sense, the key to managing inflation isn't to stop printing money, but to ensure that total demand doesn't outpace supply.

In terms of the relationship between GDP and the budget deficit, while it's true that they are calculated differently, they are interlinked. GDP is a measure of economic activity within a nation, and when the government spends, this contributes to GDP. Conversely, when the government cuts spending or raises taxes to reduce a budget deficit, this can decrease GDP.

The graph you provided from the Federal Reserve Bank of St. Louis shows the growth of the Fed's total assets over time, which has particularly increased in response to the economic downturn caused by the COVID-19 pandemic. This expansion isn't inherently problematic. In fact, it's reflective of the Fed's active role in stabilizing the economy during challenging times. It's also worth noting that central banks globally have been taking similar actions.

Lastly, thank you for your kind words about my writing. Yes, I am the person who has been sharing about the 'radio sweeper' or the 'ghost box' as some call it. I've been working on a research project with some local scientists. While we are keeping it rather quiet to avoid negative repercussions on their professional careers, there's an interesting development. A well-known physicist has shown interest in our work, which is quite encouraging. But let's return to the main topic at hand, economics.

Regarding the concern about the dollar's value, the strength of a currency is not inherently beneficial. In fact, a stronger dollar can make U.S. exports more expensive, which could potentially hurt businesses and lead to job losses. It's a delicate balance. The goal is not to have the strongest currency, but to have a stable and well-managed economy.

To address your closing remarks, the Federal Reserve and federal government have a range of tools at their disposal to manage economic challenges. The key is using these tools wisely and proactively, to balance the need for growth and stability, while also ensuring that all Americans have access to essential services like Social Security. There are many real-world examples and research studies demonstrating the effectiveness of this approach (here for examples).

Consider reading:
"The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy" by Stephanie Kelton. In this book, Kelton, a leading MMT scholar, debunks several misconceptions about federal budget deficits and the national debt. Here's a link to it on Amazon.
And also...
Freedom From National Debt by Frank Newman:
Here are a few of my favorite videos on the issue we're discussing:
Finally, it's essential to remember that the economy is not an end in itself, but a means to improve the lives of all citizens. Whether through Social Security or other measures, the ultimate goal should be to create a society where everyone has access to the resources and opportunities they need to live secure and fulfilling lives.

Thank you for those videos, very interesting stuff. Stephanie Kelton is an amazing speaker!
Frank Newman is also interesting. I'd love to see him debate one of the hard core old-school economists about monetary policy.

My takeaway from those videos is that printing money is good if it is spent wisely on growing the economy through more spending.
Tax cuts for the wealthy is bad because they don't grow the economy as much.

There needs to be guardrails on how much money can be printed, that neither one discussed. When is a weak dollar too weak?
IMHO printing money needs to have a metric as to when it is good or bad. I don't know any other metrics other than the dollar vs other currencies and the inflation rate.

I'm still not convinced that Steph and Frank are correct that there are no limits to printing money since those dollars go into the US economy in the form of SS payments or military spending, or infrastructure spending or paying Treasury Bond holders. Why don't they discuss limits on printing money?

If there was a mathematical model for all of this that would provide guardrails to money printing that keeps inflation at ~2% fine, but I don't think that there is such a mathematical proof that deficit spending leads to growth that covers the deficit. Trump and Mnuchin said that their tax cuts would grow the economy at 5%, but it never grew more than 2% (same as Obama). The only thing that grew was the Debt and interest payments on that Debt.

If something seems too good to be true, like printing mo' money, it usually is.

 

[Red Front]

Thank you for those videos, very interesting stuff. Stephanie Kelton is an amazing speaker!
Frank Newman is also interesting. I'd love to see him debate one of the hard core old-school economists about monetary policy.

My takeaway from those videos is that printing money is good if it is spent wisely on growing the economy through more spending.
Tax cuts for the wealthy is bad because they don't grow the economy as much.

There needs to be guardrails on how much money can be printed, that neither one discussed. When is a weak dollar too weak?
IMHO printing money needs to have a metric as to when it is good or bad. I don't know any other metrics other than the dollar vs other currencies and the inflation rate.

I'm still not convinced that Steph and Frank are correct that there are no limits to printing money since those dollars go into the US economy in the form of SS payments or military spending, or infrastructure spending or paying Treasury Bond holders. Why don't they discuss limits on printing money?

If there was a mathematical model for all of this that would provide guardrails to money printing that keeps inflation at ~2% fine, but I don't think that there is such a mathematical proof that deficit spending leads to growth that covers the deficit. Trump and Mnuchin said that their tax cuts would grow the economy at 5%, but it never grew more than 2% (same as Obama). The only thing that grew was the Debt and interest payments on that Debt.

If something seems too good to be true, like printing mo' money, it usually is.

You've raised some valid questions regarding the boundaries that should exist when it comes to creating money, the strength of the dollar, and the inflation rate. The way I see it, the "guardrails" you've mentioned essentially revolve around the real resources and productive capacity of the economy. In other words, the upper limit on the money we can safely create is the level at which it drives the economy beyond its capacity to produce, leading to inflation.

When it comes to the question of a weak dollar, it's important to note that the value of a currency relative to other currencies isn't an accurate measure of the strength of an economy. A lower dollar value can actually help spur economic growth by making our exports more competitive, thus potentially creating jobs and stimulating production.

We need to ensure that the creation of money doesn't outstrip the economy's ability to provide goods and services. Overstepping this boundary could lead to inflation, but with careful management, we can utilize the money supply to fuel economic growth and maintain stability. Deficit spending that directly invests in the economy, like funding for infrastructure, education, healthcare, and research has a much higher likelihood of fostering growth.

Looking ahead, advanced automation and artificial intelligence hold significant potential to further expand our productive capacity. These technologies can operate continuously, creating more goods and services than human wage labor. This, of course, raises concerns about job displacement, but there are ways we can progressively transition our economy to fully harness this potential without leaving anyone behind. We can envisage a system in the future where production isn't driven by the profit motive but by the goal of fulfilling everyone's needs and aspirations for a better, meaningful life.

I appreciate your thoughtful engagement in this conversation. Even if we don't agree on everything, it's through discussions like these that we can deepen our understanding and discover new perspectives.

 

[sealybobo]

Why are 401k’s a scam? Are you stupid or something? Oh, just a bleeding heart liberal who wants communism.
You might want to take an economics class and find out there have been 50 major reasons why communists don’t like capitalism stock markets over the past 1900. Yet, the market continues upward over time. More people, economy grows and free market capitalism drives the market up. Socialism-communism like in Russia and China caused the USSR collapse and China and Russia to adopted some free market capitalism to stay alive and gain a stronger economy. Yet, Democrats want what China and USSR had. Stupid people.

401k Scams - Why Your 401k is a Scam - Bank On Yourself

Americans love their 401(k)s for the tax deferral and the employer match. Read on to learn how you've been misled, and 6 reasons 401(k)s are scams

www.bankonyourself.com

Scam

I have a 401K but it's not all I have. One financial adviser told me I should only put 4% of my pay in so to match my employers contribution. The rest, if any, I should put in the one where you won't pay taxes on the money when you retire. Roth IRA?

 

[Cougarbear]

There are a lot of fuzzy words in your writing. “Maybe”, “Could be” is what we find in theories of physics, geology and archaeology to make the writer sound credible mixed in with a lot of extra garbage thinking people will actually believe their theories. Have you heard of Occam’s Razor? More dollars in the economy the less each dollar is worth, inflation. How many trillions has Biden pumped in? No wonder inflation got so high. Compound that with destroying all carbon based energy supply’s and future drilling which helped drive up oil since Biden reversed all Trump’s control over world oil. Inflation went up to nearly 10%, not seen since Carter did some of the same crapola.

The simple fact is, Bidenomics is a clown show causing harm to the poor and middle class. in this country. Inflation adjusted income is down 7.1% and that affects the poor and middle class. It keeps the poor Blacks in chains.

As to welfare and socialism, those aren’t the same. Socialism demand’s government control over the people’s income to spread the money around equally. No rich and no poor. Just high income earners and low income earners putting their money into the pot to be dispersed with “equity.” If God were running the show, it would work. But the humans running this have major flaws of greed and the fat “pigs” of Animal Farm always end up rich oligarchs and the rest of the farm with little to spread around. Top down tyranny with death and destruction to follow. Kill the poor, Jews, Gypsies, LGBTQ, disabled, mental and physical disabled and whoever costs too much. That’s Socialism that turns into Communism.

A welfare net is the people agreeing to put a portion of their income to help the poor and needy. A safety net. Yet, they are free to earn and keep more than their neighbors without retribution or jealousy. People get to keep all their property and own it. Not rent it like in many Blue States via property tax or property rent. So, your examples of Scandinavian countries is not Socialism. It’s capitalism with a safety net.

 

[Cougarbear]

401k Scams - Why Your 401k is a Scam - Bank On Yourself

Americans love their 401(k)s for the tax deferral and the employer match. Read on to learn how you've been misled, and 6 reasons 401(k)s are scams

www.bankonyourself.com

Scam

I have a 401K but it's not all I have. One financial adviser told me I should only put 4% of my pay in so to match my employers contribution. The rest, if any, I should put in the one where you won't pay taxes on the money when you retire. Roth IRA?

When you actually push the numbers, a Matching 401k will pay you far more than a Roth IRA. Max out your Matching 401k then, if you can, fund a Roth IRA. Or, have your wife fund a spousal Roth IRA if you can qualify. Your tax preparer can help you decide that. There may be other factors like your age and when you will start taking retirement income. Also, 401k’s sometimes have Roth options. And yes, you are in my professional wheelhouse.

But again, my question is why is a 401k a scam? It’s your money and you are investing. If you are investing in mutual funds, the market has had 76 up years to 24 down periods. Over the last 100 years. If you went to Vegas and the slot machines gave you a win with those percentages, would you keep playing and for how long? A banker or life insurance sales person write dumb articles like this. In fact, I bet they are selling “Infinite Banking “ which is a whole life insurance scam or the “Indexed” Universal Life Insurance” scam. Both are skilled liars. Stay away from it. It’s complicated and confusing. Confusion has always created profits for the life insurance industry. Ralph Nader once said back in the 1970’s in a U.S. Senate Subcommittee that the “Life Insurance Industry has been a smug sacred cow feeding the public a steady line of sacred bull.”

 

[sealybobo]

When you actually push the numbers, a Matching 401k will pay you far more than a Roth IRA. Max out your Matching 401k then, if you can, fund a Roth IRA. Or, have your wife fund a spousal Roth IRA if you can qualify. Your tax preparer can help you decide that. There may be other factors like your age and when you will start taking retirement income. Also, 401k’s sometimes have Roth options. And yes, you are in my professional wheelhouse.

But again, my question is why is a 401k a scam? It’s your money and you are investing. If you are investing in mutual funds, the market has had 76 up years to 24 down periods. Over the last 100 years. If you went to Vegas and the slot machines gave you a win with those percentages, would you keep playing and for how long? A banker or life insurance sales person write dumb articles like this. In fact, I bet they are selling “Infinite Banking “ which is a whole life insurance scam or the “Indexed” Universal Life Insurance” scam. Both are skilled liars. Stay away from it. It’s complicated and confusing. Confusion has always created profits for the life insurance industry. Ralph Nader once said back in the 1970’s in a U.S. Senate Subcommittee that the “Life Insurance Industry has been a smug sacred cow feeding the public a steady line of sacred bull.”

1. The fees
2. Look at how shitty our 401K's did in the 2000's and now because of Russia
3. I heard companies instead of paying us 4% more choose to give us 4% match.
4. Imagine you were just about ready to retire and the pandemic hit, then Russia invades Ukraine and your 401K takes a dump and how many years later do you have to wait before you can cash in?

The American public was hoodwinked: 401(k)s were established to satisfy corporations, not the interests of working Americans. Portrayed as a perpetual wealth machine, the 401(k) was meant to satisfy the needs of every employee. Yet, it was an impossible promise to fulfill: It was the great 401(k) hoax. According to William Wolman and Anne Colamosca, this was the latest act in the gradual erosion of the nation's retirement system. Drawing from reams of historical and contemporary data as well as economic, social, and political trends, they reveal the system's troubled 100year history. Beyond exposing the hoax, the authors urge everyone to take charge of their investment portfolio and recommend strategies for beating Wall Street at its own game. Timely and incisive, The Great 401(k) Hoax is guaranteed to inspire debate and action-from the water cooler to the boardroom to the voting booth.

 

[Red Front]

There are a lot of fuzzy words in your writing. “Maybe”, “Could be” is what we find in theories of physics, geology and archaeology to make the writer sound credible mixed in with a lot of extra garbage thinking people will actually believe their theories. Have you heard of Occam’s Razor? More dollars in the economy the less each dollar is worth, inflation. How many trillions has Biden pumped in? No wonder inflation got so high. Compound that with destroying all carbon based energy supply’s and future drilling which helped drive up oil since Biden reversed all Trump’s control over world oil. Inflation went up to nearly 10%, not seen since Carter did some of the same crapola.

The simple fact is, Bidenomics is a clown show causing harm to the poor and middle class. in this country. Inflation adjusted income is down 7.1% and that affects the poor and middle class. It keeps the poor Blacks in chains.

As to welfare and socialism, those aren’t the same. Socialism demand’s government control over the people’s income to spread the money around equally. No rich and no poor. Just high income earners and low income earners putting their money into the pot to be dispersed with “equity.” If God were running the show, it would work. But the humans running this have major flaws of greed and the fat “pigs” of Animal Farm always end up rich oligarchs and the rest of the farm with little to spread around. Top down tyranny with death and destruction to follow. Kill the poor, Jews, Gypsies, LGBTQ, disabled, mental and physical disabled and whoever costs too much. That’s Socialism that turns into Communism.

A welfare net is the people agreeing to put a portion of their income to help the poor and needy. A safety net. Yet, they are free to earn and keep more than their neighbors without retribution or jealousy. People get to keep all their property and own it. Not rent it like in many Blue States via property tax or property rent. So, your examples of Scandinavian countries is not Socialism. It’s capitalism with a safety net.

Let's clarify some misconceptions:

1. Inflation's complexities can't be reduced to 'more money = less value'. Various factors like pandemic response, supply chain disruptions, and increased demand also contribute to current inflation.
2. Our energy strategy involves transitioning to modern, safe, and clean nuclear power. This is about achieving sustainable energy independence, not ending carbon-based energy.
3. Socialism isn't synonymous with 'equal income' or 'top-down tyranny'. It involves community control over production and distribution to varying degrees. Western European countries, with their prosperous mixed economies, challenge the idea that socialism necessarily leads to destruction.
4. Wage stagnation isn't only due to business taxation. Globalization, tech change, union decline, and corporate practices contribute. Moderate tax increases on the wealthy can address income inequality without stifling growth.
5. Finally, labeling progressive Democrats as 'communists' for supporting policies such as universal healthcare, tuition-free education, minimum wage hikes, labor union rights, and housing the homeless is inaccurate. These are standard policies in Western Europe. If advocating for these policies labels one as a 'communist', then all of Western Europe would have to be classified as such.

Economics and politics are nuanced. Let's ensure our discussions reflect this complexity.

 

[sealybobo]

When you actually push the numbers, a Matching 401k will pay you far more than a Roth IRA. Max out your Matching 401k then, if you can, fund a Roth IRA. Or, have your wife fund a spousal Roth IRA if you can qualify. Your tax preparer can help you decide that. There may be other factors like your age and when you will start taking retirement income. Also, 401k’s sometimes have Roth options. And yes, you are in my professional wheelhouse.

But again, my question is why is a 401k a scam? It’s your money and you are investing. If you are investing in mutual funds, the market has had 76 up years to 24 down periods. Over the last 100 years. If you went to Vegas and the slot machines gave you a win with those percentages, would you keep playing and for how long? A banker or life insurance sales person write dumb articles like this. In fact, I bet they are selling “Infinite Banking “ which is a whole life insurance scam or the “Indexed” Universal Life Insurance” scam. Both are skilled liars. Stay away from it. It’s complicated and confusing. Confusion has always created profits for the life insurance industry. Ralph Nader once said back in the 1970’s in a U.S. Senate Subcommittee that the “Life Insurance Industry has been a smug sacred cow feeding the public a steady line of sacred bull.”

I heard back when they introduced 401K's the way they sold it to Americans was this was going to be ON TOP of your Pension and Social Security. So when you retire, instead of living off your pension and social security, this would be a 3rd bucket. Little did we know one of the buckets (pensions) was going to go away.

My brother is a VP of HR. He says pensions might make a comeback.

Pensions could be the latest retro comeback story - Marketplace

The mythical retirement scheme that's known as a pension — most of which went away in the last half-century — could be on its way back in, thanks to acute labor shortages in the economy. Chris Farrell, Marketplace's senior economics contributor, takes us through how competition might inspire...

www.marketplace.org

Could Defined-Benefit Pension Plans Make a Comeback?

There are early signs of support for reviving the plans in the private sector.

www.morningstar.com

 

[sealybobo]

Why are 401k’s a scam? Are you stupid or something? Oh, just a bleeding heart liberal who wants communism.
You might want to take an economics class and find out there have been 50 major reasons why communists don’t like capitalism stock markets over the past 1900. Yet, the market continues upward over time. More people, economy grows and free market capitalism drives the market up. Socialism-communism like in Russia and China caused the USSR collapse and China and Russia to adopted some free market capitalism to stay alive and gain a stronger economy. Yet, Democrats want what China and USSR had. Stupid people.

Let's compare them to what we were getting before

Once upon a time, many workers didn’t need to worry about how they would spread 401(k) savings across their retirement years. Instead, they participated in a defined-benefit pension plan. Employers contributed to the plans and managed them; at retirement, a monthly check started arriving in the mail, and the checks continued until the retired employee died.
But the availability of these plans has plunged over the past few decades: In 1989, 32% of workers had a traditional pension versus just 12% in 2019

But the availability of these plans has plunged over the past few decades: In 1989, 32% of workers had a traditional pension versus just 12% in 2019

Most of that decline occurred in the private sector; pensions remain the central retirement benefit for most state and municipal workers.

The revival of defined-benefit pension plans would be a positive development for retirement security in the United States.

The tax-deferred defined-contribution saving system, which largely has replaced defined-benefit plans in the private sector over the past four decades, has primarily accrued wealth for the affluent. The system has not come close to closing the gap left by the decline of defined-benefit pensions, which provide a benefit to all covered employees.

the median balance in a retirement account in 2019 for a working household nearing retirement (age 55-64) was just $144,000—an amount that will not last very long in retirement. And it looks worse beyond the median figures, as most of the assets are being accumulated in the two highest quintiles of income.

Also consider the Elder Index, produced by the Gerontology Institute at the University of Massachusetts Boston, which measures the cost of living for older people living as couples or alone. It is built around the typical budgets of seniors, and it shows that roughly half of Americans over age 65 living alone have incomes that are below the index.

Meanwhile, Social Security is bogged down in political debate about how to avoid a steep 20% cut in benefits if we reach the point of trust fund exhaustion in 2035—not to mention that everyone born after 1960 will receive lower benefits because of the higher retirement ages legislated in 1983.

So, even a scintilla of hope for defined-benefit pension plans is intriguing. “Some organizations I’ve spoken with that terminated their plans are wondering if this is something that they need to come back to,”

 

[Cougarbear]

1. The fees
2. Look at how shitty our 401K's did in the 2000's and now because of Russia
3. I heard companies instead of paying us 4% more choose to give us 4% match.
4. Imagine you were just about ready to retire and the pandemic hit, then Russia invades Ukraine and your 401K takes a dump and how many years later do you have to wait before you can cash in?

The American public was hoodwinked: 401(k)s were established to satisfy corporations, not the interests of working Americans. Portrayed as a perpetual wealth machine, the 401(k) was meant to satisfy the needs of every employee. Yet, it was an impossible promise to fulfill: It was the great 401(k) hoax. According to William Wolman and Anne Colamosca, this was the latest act in the gradual erosion of the nation's retirement system. Drawing from reams of historical and contemporary data as well as economic, social, and political trends, they reveal the system's troubled 100year history. Beyond exposing the hoax, the authors urge everyone to take charge of their investment portfolio and recommend strategies for beating Wall Street at its own game. Timely and incisive, The Great 401(k) Hoax is guaranteed to inspire debate and action-from the water cooler to the boardroom to the voting booth.

You are drinking the Socialist Kool-Aid. The 401k is a long term investment. 30-40 years. Just in an S&P 500 fund you would have received 10% compounded annual growth returns. And many funds have done better inside your 401k or IRA. I can show you hypotheticals where even during a 40% drop one year during the past 20 years of retirement a person could take out 6% a year and end up with what they started with.
The 401k and IRAs were put into place not to benefit the corporations. They were put into place to replace Pension Plans going broke and the pressure on Social Security. The Congress gave businesses incentives to get their employees to invest in the market.
Again, these articles you are referring to are Insurance scams like Infinite banking and universal life insurance that actually has high fees that eventually will drain 100% of your cash value through what is called the Mortality Cost Fee. It goes up every year and surpasses the premium you pay for the policy sucking money out of your cash values which are owned by the insurance companies.

 

[Cougarbear]

Let's clarify some misconceptions:

1. Inflation's complexities can't be reduced to 'more money = less value'. Various factors like pandemic response, supply chain disruptions, and increased demand also contribute to current inflation.
2. Our energy strategy involves transitioning to modern, safe, and clean nuclear power. This is about achieving sustainable energy independence, not ending carbon-based energy.
3. Socialism isn't synonymous with 'equal income' or 'top-down tyranny'. It involves community control over production and distribution to varying degrees. Western European countries, with their prosperous mixed economies, challenge the idea that socialism necessarily leads to destruction.
4. Wage stagnation isn't only due to business taxation. Globalization, tech change, union decline, and corporate practices contribute. Moderate tax increases on the wealthy can address income inequality without stifling growth.
5. Finally, labeling progressive Democrats as 'communists' for supporting policies such as universal healthcare, tuition-free education, minimum wage hikes, labor union rights, and housing the homeless is inaccurate. These are standard policies in Western Europe. If advocating for these policies labels one as a 'communist', then all of Western Europe would have to be classified as such.

Economics and politics are nuanced. Let's ensure our discussions reflect this complexity.

Just #1 is a prime example of printing more dollars making each dollar worth less, inflation.
#2. Have you bothered looking at your gas, electric and gasoline bills lately. Inflation galore! How are electric plants powered? COAL! Lol!
#3. Once again you confuse socialism with welfare nets. The “community” is those running the community’s government. Forcing people to spread the wealth around but not for welfare purposes. There are small communities that have managed this line the Amish. But, that’s about it. Mormons tried it in the 1830’s and it flopped. But, we aren’t talking about small communities. We are talking about political governments forcing people to spread the wealth around. Unfortunately, I have to say it again, the people in control don’t spread their wealth into the population under Socialist governments. They become the “pigs” of Animal Farm. Scandinavian countries are not these governments. Scandinavian countries allow people to keep their property including money after they pay into the welfare net. If they don’t like it, they are free to move to another country. Try that with the USSR or China or Cuba. I don’t understand why a bright person like yourself can’t grasp the difference between what China does and what the Scandinavians do.
#4. Kensian economics destroys wage growth and promotes socialist methods of redistribution forcefully. Wage growth skyrocketed under Trump even for Blacks due to deregulation of business and lowering taxes for those who make jobs for others and pays them. And, when prices of goods are inflated, corporations pass the price increases and wage increases to the consumers expanding inflation. Let the market control prices and wages. It worked for Trump and blacks.
#5. Some of the countries in Western Europe are going down the same rabbit hole the U.S. is going, towards communist socialism. Not the Scandinavian countries. Forcing people who didn’t go to college or those who did and got good educations with meaningful degrees to pay for the lazy poor choices of college students is socialism and tyranny. It’s being attempted by force by Biden. In other words, shut up and sit down or go to jail.

 

[sealybobo]

You are drinking the Socialist Kool-Aid. The 401k is a long term investment. 30-40 years. Just in an S&P 500 fund you would have received 10% compounded annual growth returns. And many funds have done better inside your 401k or IRA. I can show you hypotheticals where even during a 40% drop one year during the past 20 years of retirement a person could take out 6% a year and end up with what they started with.
The 401k and IRAs were put into place not to benefit the corporations. They were put into place to replace Pension Plans going broke and the pressure on Social Security. The Congress gave businesses incentives to get their employees to invest in the market.
Again, these articles you are referring to are Insurance scams like Infinite banking and universal life insurance that actually has high fees that eventually will drain 100% of your cash value through what is called the Mortality Cost Fee. It goes up every year and surpasses the premium you pay for the policy sucking money out of your cash values which are owned by the insurance companies.

I was contributing the max for a minute. I went down to 20% so I would have enough to buy my lease F150 when it's time to turn it in. So as soon as I buy the car and have at least $5K in my checking, I'll up my 401K again to the max. Still think it's a scam but I also think stocks are a scam too. Remember Wolf of Wallstreet?

So I gave this guy $40K to invest. It quickly went up to $65K. I told him "sell it!" He said no it's long term investment leave it alone. Then Covid and Russia happened. Today it's $44K. Mother fucker! I KNEW I should have sold!!!

Google, Amazon, Apple, Caterpillar, Costco, Exxon, Mobil, Hershey, J&J, JP Morgan, Microsoft, Paypal, Pepsi, Walt Disney, and a few others.

This is what I mean by it's a scam. So I give him $40K, he says he should make me 10% a year, it shoots up to $65K but then goes back down to $40K. How many years have I had this investment? And I've only made $4K?

And what do people tell me? Now that the market sucks, now is the time to buy MORE! See why it feels like a scam. If my investment goes down they tell me to buy more? I get why but damn, it sounds fishy to me. LOL.

 

[WorldWatcher]

401k Scams - Why Your 401k is a Scam - Bank On Yourself

Americans love their 401(k)s for the tax deferral and the employer match. Read on to learn how you've been misled, and 6 reasons 401(k)s are scams

www.bankonyourself.com

Scam

I have a 401K but it's not all I have. One financial adviser told me I should only put 4% of my pay in so to match my employers contribution. The rest, if any, I should put in the one where you won't pay taxes on the money when you retire. Roth IRA?

Ya it's a Roth,

Roth IRA's are good (IMHO) for younger people. You pay taxes on the income when earned then deposits are made "Post Tax". With a Roth then, dividends/interest are "tax free". However it's important to recognize the time value of money. Put a bunch of money in a Roth at age 65 and start using at at 67, it's no real benefit. However deposit money in you 20 for your 60's and the compound interest can be interesting.

WW

 

[sealybobo]

Ya it's a Roth,

Roth IRA's are good (IMHO) for younger people. You pay taxes on the income when earned then deposits are made "Post Tax". With a Roth then, dividends/interest are "tax free". However it's important to recognize the time value of money. Put a bunch of money in a Roth at age 65 and start using at at 67, it's no real benefit. However deposit money in you 20 for your 60's and the compound interest can be interesting.

WW

What about 52-65?

 

[Cougarbear]

Did he show you a hypothetical if say 20-30 years? If he did, there are down years. But, still did 9-11% LONG TERM. He told you long term. However, he obviously didn’t explain mutual fund investments. There are things called dividends and capital gains over time that when the market is down they buy up shares at a discount. When the market goes up, you will see a big increase. Fools buy high and sell low. Mutual funds have been around since 1924. No scam. 76 up years versus 24 down years over the past 100 years.

 

[sealybobo]

You are drinking the Socialist Kool-Aid. The 401k is a long term investment. 30-40 years. Just in an S&P 500 fund you would have received 10% compounded annual growth returns. And many funds have done better inside your 401k or IRA. I can show you hypotheticals where even during a 40% drop one year during the past 20 years of retirement a person could take out 6% a year and end up with what they started with.
The 401k and IRAs were put into place not to benefit the corporations. They were put into place to replace Pension Plans going broke and the pressure on Social Security. The Congress gave businesses incentives to get their employees to invest in the market.
Again, these articles you are referring to are Insurance scams like Infinite banking and universal life insurance that actually has high fees that eventually will drain 100% of your cash value through what is called the Mortality Cost Fee. It goes up every year and surpasses the premium you pay for the policy sucking money out of your cash values which are owned by the insurance companies.

Though there are pros and cons to both plans, pensions are generally considered better than 401(k)s because all the investment and management risk is on your employer, while you are guaranteed a set income for life.

 

[WorldWatcher]

What about 52-65?

Personally? I don't think it's as valuable later in life. But there are individual variables.

The value normally associated with a traditional 401K is that you put money away pre-income tax, the deposits grow tax fee, however Uncle Same want's their taxes and you pay taxes upon withdrawal once you reach retirement age. The real advantage here is if you will be in a lower income tax bracket in retirement than in your working years. Just to pick numbers lets say you working years are in the 27% bracket, but in retirement you will be in the 22% bracket. There is a tax savings of there because of the lower tax rate.

So the variables are "What other income will you have in retirement." (Not likely to work out for the wife and I was with our Defined Benefits income we will remain in the same tax bracket.)
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With a Roth the real savings comes from having the money in the post-tax savings plan for a long time. You paid the taxes on the deposits, but you don't pay taxes on the interest, or the interest on the interest, or the interest on the interest on the interest. (The whole compound interest thingy.) I mean sure if you deposit a $1,000,000 post-tax at 50 you can get a significant return, but most middle class folks don't have that kind of cash laying around to seed a Roth to a high value in later years.
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Don't get me wrong, I have nothing against the Roth IRA, Traditional IRA, or 401K type plans. I highly support them but to make them valuable in retirement you have to start young, be disciplined, and look for long term growth. I DOESN'T MATTER which it is, what does matter it not waiting until you are in your 50's and 60's to start.
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My wife and I have been, I guess fairly responsible. We both earned military pensions which have provided some financial security and flexibility. (We are ex-enlisted, so we are talking big bucks here, but we are still thankful.) Since our 30's every single paycheck we've received have had a little somet'n-somet'n go into our Defined Contributions retirement accounts. As a result our disposable income will actually increase when we stop working in a few year.

WW

 

[sealybobo]

Ya it's a Roth,

Roth IRA's are good (IMHO) for younger people. You pay taxes on the income when earned then deposits are made "Post Tax". With a Roth then, dividends/interest are "tax free". However it's important to recognize the time value of money. Put a bunch of money in a Roth at age 65 and start using at at 67, it's no real benefit. However deposit money in you 20 for your 60's and the compound interest can be interesting.

WW

Pensions offer greater stability than 401(k) plans. With your pension, you are guaranteed a fixed monthly payment every month when you retire. Because it's a fixed amount, you'll be able to budget based on steady payments from your pension and Social Security benefits. A 401(k) is less stable.

The COVID-19 pandemic has created a huge amount of economic uncertainty. Many people are unsure of their financial future -- so much so that 40% of Americans are afraid they won't be able to retire because of financial setbacks related to the pandemic.

• In 2019, the average retirement savings for American households was $65,000.
• The average American under 35 has $13,000 saved for retirement.
• 62% of Americans aged 18 to 29 have some retirement savings, but only 30% percent feel on track for retirement.
• 55% of non-retirees have a 401(k) or 403(b) while 25% have no retirement savings.
• Americans with a high school degree have an average retirement savings account value of $20,000, while those with a college degree have an average account value of $119,000.
• The average retirement savings of white Americans was roughly $45,000 more than that of Black and Hispanic Americans.
• Retirement savings for households in the bottom 25% of net worth grew by $2,710 from 1989 to 2019. Savings for the top 10% of net worth grew by over $600,000 during that same time period.
• 51% of Americans retire at 61 or earlier, and 23% retire between 62 and 64, before Medicare coverage kicks in at 65. White Americans tend to retire later than Black or Hispanic Americans, despite having more savings.