-
If you enjoy the forum please consider supporting it by signing up for a NES Membership The benefits pay for the membership many times over.
New MA.Bill Reshuffling your retirement plans
- Thread starter bolt
- Start date
- Joined
- Apr 24, 2005
- Messages
- 47,505
- Likes
- 33,508
A trap I have heard is in the act is subjecting inheritees to RMDs based on the shorter of their expected life span or 10 years; not their expected lifespan starting at age 59.5.
Read the bill & this guys bio. By the globe no less. Rep. Richard Neal’s Washington high life - The Boston Globe
The direction and backers of this legislations representative (Rich.Neal-D) threatens every responsible individuals retirement.
He's a paid for hack,..so what else is new.
Dennis in MA
NES Member
- Joined
- Feb 12, 2007
- Messages
- 38,167
- Likes
- 33,124
Well, here's my take:
1. There are already scads of plans that employers could create if they wanted.
2. Safe Harbor rules are for the circular file. If you don't allow a small employer to contribute whatever they want (subject to the same maximums as anyone else), they are not going to be excited to set up a plan to benefit workers. There should be NO Safe Harbor rules for companies under. . . . 50 or so employees. Maybe 100. Maybe 1,000.
3. As a freedom-loving SOB I have a real hard time with plans that "make" people contribute to a 401k. It's their $. If they wanna be stupid, I'm not keen on a plan to stop them. Plus, if they are stupid with small money, they'll be stupid with big money - so it's a self-defeating act.
4. We don't need more complicated. We need reform to the current plans that make them SIMPLER. Period. No cool acronym named crap. Just fix it. Oh right. You're Congress. You'll do about 60% help and 40% complete F-up in order that tomorrow you can do it again. . . and again. Job security, right?
1. There are already scads of plans that employers could create if they wanted.
2. Safe Harbor rules are for the circular file. If you don't allow a small employer to contribute whatever they want (subject to the same maximums as anyone else), they are not going to be excited to set up a plan to benefit workers. There should be NO Safe Harbor rules for companies under. . . . 50 or so employees. Maybe 100. Maybe 1,000.
3. As a freedom-loving SOB I have a real hard time with plans that "make" people contribute to a 401k. It's their $. If they wanna be stupid, I'm not keen on a plan to stop them. Plus, if they are stupid with small money, they'll be stupid with big money - so it's a self-defeating act.
4. We don't need more complicated. We need reform to the current plans that make them SIMPLER. Period. No cool acronym named crap. Just fix it. Oh right. You're Congress. You'll do about 60% help and 40% complete F-up in order that tomorrow you can do it again. . . and again. Job security, right?
SFC13557
NES Member
This is a Federal Bill/law and it would increase the age from 70 1/2 to 72 before you are forced to start withdrawing from your 401K and if you die and leave the balance to a relative they would have 10 yrs to drain the account or pay a heavy tax from my understanding.
Dennis in MA
NES Member
- Joined
- Feb 12, 2007
- Messages
- 38,167
- Likes
- 33,124
Cost. Think of a plan that was never designed by Congress that requires massive amounts of bookkeeping in order to maintain these stupid Safe Harbor type calculations. Adding employees to it raises the cost on employers.
Yes, I said it. The 401(k) was NEVER designed as a saving plan. Look it up. Some guy read code 401 and realized that K was sort of a loophole to make a new kind of retirement plan. He filled a need and it took off. But it means there are very few logical rules surrounding a 401(k).
For instance, there isn't really a set set of rules for when you can withdraw and for what reasons, how it's invested (some 401(k) plans STILL are invested by the Trustee - most of them corrupt union plans), when statements are available, etc., It's a cluster-bleep.
Make it real. Amend 401(k) and set it up properly and eliminate the top-heavy rules and such. It makes zero sense. Suddenly, the cost goes to near zero and then PT people can join b/c your plan provider (Fidelity, et al) want MORE participants in order to grab more assets.
The only other problem with 401(k) plans is as they pertain to unions. Union mgmt is so dumb they don't understand that you should never negotiate for 401(k) benefits. Yet so many people I see working union jobs have half the 401(k) benefits (outside of match) as non-union employees. Effectively, the union has limited member access to better plans and more money under the guise of "helping" them. They aren't helping them. They're screwing them. Again.
Yes, I said it. The 401(k) was NEVER designed as a saving plan. Look it up. Some guy read code 401 and realized that K was sort of a loophole to make a new kind of retirement plan. He filled a need and it took off. But it means there are very few logical rules surrounding a 401(k).
For instance, there isn't really a set set of rules for when you can withdraw and for what reasons, how it's invested (some 401(k) plans STILL are invested by the Trustee - most of them corrupt union plans), when statements are available, etc., It's a cluster-bleep.
Make it real. Amend 401(k) and set it up properly and eliminate the top-heavy rules and such. It makes zero sense. Suddenly, the cost goes to near zero and then PT people can join b/c your plan provider (Fidelity, et al) want MORE participants in order to grab more assets.
The only other problem with 401(k) plans is as they pertain to unions. Union mgmt is so dumb they don't understand that you should never negotiate for 401(k) benefits. Yet so many people I see working union jobs have half the 401(k) benefits (outside of match) as non-union employees. Effectively, the union has limited member access to better plans and more money under the guise of "helping" them. They aren't helping them. They're screwing them. Again.
Coda
NES Member
It shouldn’t be up to an employer or the government to make sure you have enough $$$ for a comfortable retirement. It should be the employee’s responsibility. As it stands now too many people don’t even take advantage of company matched 401k’s and now they want to expand that?
I am retired because I saved well…… AND because I didn’t buy brand new cars I couldn’t afford, I didn’t buy a house I couldn’t afford, I didn’t pay for college educations that I couldn’t afford (by borrowing against my house), I didn’t go on fancy vacations I couldn’t afford and on and on and on…….
But now we have a younger generation who feel entitled to all the good things in life. Forget about retirement and saving just spend because “you deserve it”. Then when it comes time for younger generations to retire no worries because the past generations will have been sucked dry so the liberal politicians can take care of their retirement needs.
I am retired because I saved well…… AND because I didn’t buy brand new cars I couldn’t afford, I didn’t buy a house I couldn’t afford, I didn’t pay for college educations that I couldn’t afford (by borrowing against my house), I didn’t go on fancy vacations I couldn’t afford and on and on and on…….
But now we have a younger generation who feel entitled to all the good things in life. Forget about retirement and saving just spend because “you deserve it”. Then when it comes time for younger generations to retire no worries because the past generations will have been sucked dry so the liberal politicians can take care of their retirement needs.
Lol this smells like possibly some stuff buried in there to destroy wealth made by intermediate income earners etc? Conhugecos don't like competition from upstarts, and middle wealth are the biggest threats.. .
To be fair, the cost of housing (both ownership and rentals) is vastly higher now than it was when you likely got into the housing market. The cost of education has also increased exponentially, coupled with an increase in jobs that require degrees. Oh, as for the younger generations, they’ll likely lose social security money that they paid into, because your generation mismanaged it. Sure, it’s a ponzy scheme at heart, but its funds were still pillaged for other purposes by the “older” generations.
I agree with some of your sentiment in regards to the consumerist culture of current society, but it’s not really a generational thing. There’s enough blame to go around.
This sounds like a great incentive for people to leave MA before they start drawing from their retirement funds. Greedy state is probably going to be wondering where all the wealthy retiree money went in short order. Kind of like what's happening to New York and Illinois right now.
Coda
NES Member
I had a job that required a college degree, and I lost because it was off shored, my wife had a job that required a college and guess what, it was off shored. At today’s tuition costs a college education is a waste of money in my opinion. Much better off learning a trade that can’t be off shored to India.
Sorry for the rant, sensitive subject with me. I do understand your point, things have changed since I entered the job and housing market. But some of the idea’s on how to handle these changes I don’t agree with.
I can’t find what’s wrong with this? It doesn’t Tax my retirement savings more,it doesn’t preclude me from collecting Social Security etc. seems to just enable people to get into 402ks easier. That’s not a bad thing
Dennis in MA
NES Member
- Joined
- Feb 12, 2007
- Messages
- 38,167
- Likes
- 33,124
That's not entirely true.
While college overall is far more expensive, there ARE options to keep the costs down. You can get a 4-year education in Mass for less than $50,000 today. Not as cheap as 1980 or so, adjusted for inflation, but it's not outrageous either. Just about anyone looking for a college-degreed position can pay off $50K.
Housing? Not really either. 1970, the average American home was something like 800sf. Today it's 2,000. So knock 2.5x off the price of housing today to get a true measure of inflation over time regarding housing. Suddenly the inflationary rate isn't as crazy as it seems. (And almost all of that inflationary rate can be attributed to the government reducing the borrowing requirements.)
Social Security will self-correct by about 2055 or so. The problem isn't mismanagement by the "current generation." Far far from it. The problem is it was a promise of "pay today and we promise to pay you tomorrow." Well, the first folks that paid were a HUGE class of people. What a country. They can pay in very little and the beneficiaries get a ton.
Fast forward 40 years and now that bubble (aka The Baby Boom) is retiring. Now you've got LESS workers paying for MORE retirees. WTF,O???
This problem was addressed in teh late 70's and further addressed during Reagan's administration. We started collecting a S-TON more $ than we needed to pay out in order to have some $ left over later on.
But at some point, the last Baby Boomer will die and the problem will self-correct. In 2042, the last baby boomer will be 80. The first will be long dead. IIRC, but SSI is "bankrupt" in 2035 or so. WE've got to figure out how to bridge about 20 years. At a sliding-declining scale. 2035 is the worst year. Every year thereafter, the # of retirees goes DOWN.
Now, as far as entitlement and generations - there is little generational difference, outside of the Depression-era folks, in retirement success.
Inflationary speaking, today's "young people" have it 100x better. Better health care. Better tech. More cars. More TV's. Bigger homes. Vacations not camping in a mosquito-infested swamp. And none of that is a bad thing. (But it plays into the higher housing/education costs - other costs have actually gone DOWN.)
The rift is b/c the "older generations" didn't have any of that. So they see that as entitlement. But, interestingly enough, it was the work of the previous generation to GIVE them those things that caused the younger ones to "need" it. It's a bitter cycle.
Is it easier to retire 20 years ago than today or 20 years from now? Yes. And not for the reasons you'd think. It has zip to do with housing or college or TV's or cars. It has to do with how companies save for your retirement. 20 years ago, if you worked for a big company, you had a pension. That's all but disappeared today. You'd have less savings but more surety in retirement.
Gosh this is getting long. Don't mean this to be a "you're totally wrong whipper snapper!" LOL. Just a lot of facts out there that no one talks about.
As for a college education and debt . . .
There is a lot to be said for Co-Op programs. I lived at home but easily made more than enough money on Co-Op to pay all of my tuition and books, with money left over. It also gave a sense of responsibility and real-world experience prior to graduation. What I gave up was all those Summers slumming on the beach, but it was well worth it. When I worked for DEC, I started a Co-Op program in my department, we paid them very well (women I hired got the same rate as men, no inequality) and we hired every one of them after graduation. It was a great win-win for all involved.
There is a lot to be said for Co-Op programs. I lived at home but easily made more than enough money on Co-Op to pay all of my tuition and books, with money left over. It also gave a sense of responsibility and real-world experience prior to graduation. What I gave up was all those Summers slumming on the beach, but it was well worth it. When I worked for DEC, I started a Co-Op program in my department, we paid them very well (women I hired got the same rate as men, no inequality) and we hired every one of them after graduation. It was a great win-win for all involved.
I thought that same thing so that's why I asked for a simplification. From what I understand from a previous poster that was not mentioned in the linked article is that they want to change how money that you leave to your survivors in a 401k is taxed .
Dennis in MA
NES Member
- Joined
- Feb 12, 2007
- Messages
- 38,167
- Likes
- 33,124
A-freaking-Men. Exactly my point. These kids (and even at 30, they are still acting like children) decided to goof off for 4 years figuring "well, I'll figure out how to pay for this later." Now it's later. Good luck with that.
I didn't co-op. I worked in the Financial District Fri/Sat plus all Summer and EVERY vacation. Plus I worked on campus at another job M-Th. I got Sunday's off. Stayed home, chilled and did homework.
Summers off? Spring break??? What are these things?
A client of mine who's worked hard - especially after a messy divorce 20 or so years ago - to be where he is was relating talking with his goof-off brothers. "Gee, aren't you lucky getting to retire so well." He then handed it to them when they were off blowing all of their money for 40 years, he was saving and watching them - so now they can watch him. They didn't like that. Seems they should have been able to have fun AND have fun. Ant/Grasshopper complex.
Logan's Run 2019!
namedpipes
NES Member
As I read it, the bill proposes to kill off retirees that outlive their retirement savings. I'm not 100% on board with that.
Is there anything in there that taxes or seizes more money/assets than I already send to 401 whatever?
Is there anything in there that taxes or seizes more money/assets than I already send to 401 whatever?
JDL
NES Member
If Richard Neal is involved it is a money grab desguised as a plan to help you ln reality it will just end up as a way to get into your pocket to support people that refuse to work at your expense .
