Americans Are Putting Billions More Than Usual in Their 401(k)s • Hacker News Board

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#131

Post by curiousbiped » Thu, Jan 05, 2017, 6:22 PM UTC

saryant wrote: post #97

guelo wrote: post #79

401k is such a scam, you get a handful of high fee funds to invest in. Wall Street thieves billions of dollars, all sanctioned by the government and encouraged by the financial advise industry. Employees should only contribute to a 401k up to any employer match. Beyond that put your money in an IRA.

My 401k has better funds than I could ever get in my IRA. Yes, many 401k's have terrible fund choices but by no means do all of them fall prey to that. Also, if you're maxing out both your IRA and 401k limits, even if you have a lousy 401k, you now have tax-advantaged dollars that you can roll over to Vanguard or Fidelity when you change jobs.

It sucks that we have to use our employer's 401k vendor. We should be able to have our 401k contributions sent to any valid 401k provider like Vanguard/Fidelity/etc instead of only being able to move it when we switch jobs.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#132

Post by brewdad » Thu, Jan 05, 2017, 6:23 PM UTC

adventured wrote: post #117

hillz wrote: post #102

Earlier quoted context omitted.

I mean... He did lose the popular vote. So 'most' people didn't have an influence on the election. Or at least, the plurality of people.

Trump easily won the popular vote for the 48 states that aren't California and New York. Popular vote indeed. There's a very good reason the electoral college exists.

CA would be the 7th largest economy in the world if it were its own country. NY would be 11th. But yes, let's just pretend like they don't matter when it comes to the US as a whole.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#133

Post by thesimpsons1022 » Thu, Jan 05, 2017, 6:25 PM UTC

ProAm wrote: post #107

hillz wrote: post #102

Earlier quoted context omitted.

I mean... He did lose the popular vote. So 'most' people didn't have an influence on the election. Or at least, the plurality of people.

Popular vote has never meant anything in America in all it's existence. But the point is a person with zero political experience, completely outside the political echo chamber/insiders club just won the most powerful office on earth. Whether you are for him or against him I believe it does show that people can absolutely start a change.

nothing changed. instead of a racist white old billionaire buying a candidate, they just decided to run themselves.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#134

Post by RobertoG » Thu, Jan 05, 2017, 6:25 PM UTC

athenot wrote: post #115

RobertoG wrote: post #48

Earlier quoted context omitted.

Maybe a little out of scope, but, is it not the important issue if the society we live when we retire is richer or poorer than the society today? I mean, if we live in a society, for instance, three times richer (per capita) than today, it would be very strange that old people will have a hard time. In the other hand, if it's a poorer society, even people with savings are probably to have a hard retirement.

It could be a problem if, using your example, society is 3 times richer but that comes from 10% being a lot richer and 90% being somewhat poorer. Inequality, it seems, is rising over time.

I suppose that what surprise me is the contradiction between the optimism about the future of HN crowd and their pessimism in this issue, as if nothing could be done (in the case that you think something should be done, of course).

The inequality thing is far from unavoidable. In a democracy, at least, a society perceived as more fair for the majority should be attainable.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#135

Post by dlp211 » Thu, Jan 05, 2017, 6:25 PM UTC

MikeTV wrote: post #73

klodolph wrote: post #37

Earlier quoted context omitted.

It's not quite that simple, it really depends on what you suspect your tax rates are going to be. Roth contributions are essentially taxed at your marginal rate right now, but traditional 401k withdrawals are taxed like income when you make the withdrawal. There are lots of situations where you would want to lower your tax burden now instead of go for the Roth. Note that you can also have a Roth 401k or a traditional…

Worth noting that the limits are different between Roth IRAs and Traditional IRAs, though, if you have a retirement plan at work. A married couple making between 119k and 186k wouldn't get any deduction for the trad IRA, so might as well go with the Roth even if they think their income will be much lower in the future. The Roth also lets you pull out contributions later without penalty, which is a nice worry-free saf…

One caveat. A married couple where the other person doesn't work can still contribute to a traditional IRA and the couple gets to deduct it on their taxes. The limit for this is 186k and it is called a spousal IRA.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#136

Post by adventured » Thu, Jan 05, 2017, 6:25 PM UTC

thraway2016 wrote: post #49

pwthornton wrote: post #28

Earlier quoted context omitted.

You buy shares in the stock market, not dollars, so a crash shouldn't hamper your ability to retire, unless you want to retire during the crash itself (although diversity of assets would help with this). The stock market recovered years ago from the Great Depression and is doing really well again.

I'm not sure if "crash" is the problem. Crashes happen in markets, it's part of the business cycle. OP is discussing a 30+ year time horizon, though. I can think of a few potential things that would precipitate not just a crash, but a long-term economic malaise: - Climate change - Political/social unrest (extrapolate Brexit, Trump, etc) - Mass unemployment caused by automation (you can't "retrain" 5MM 50yo truck driv…

> Empire collapse (has happened with every single empire in history - what makes the U.S. exempt?)

The US isn't anything like traditional historical empires for one. It hasn't built its prosperity on invading other nations to annex them and plunder their national wealth, which is traditionally how empires temporarily sustain themselves. The US built its immense wealth today (just under half of all private wealth on earth is owned by Americans) overwhelmingly through invention, engineering, industry, trade, manufacturing, radical productivity gains spanning two centuries, and lots of immigration. Historical empires have always run out of lands to conquer and wealth to steal from other nations, and then they collapse as they fail to placate their own people or get defeated militarily by the lands they previously conquered.

The USD global reserve is a vulnerability? That's one potential issue. However, the US was the world's largest economy - by about 1890 - long before it had the global reserve currency. Japan has a disastrous situation on its hands economically, and a currency they're very aggressively abusing, and yet they're still the world's #3 economy with a substantial GDP per capita. The notion the US would just wilt without the global reserve currency, is absurd.

What lands has the US annexed that it's going to get pushed out of (and lose the plunder/tax from said nations)? What nation/s is the US stealing all of its prosperity from, such that that is going to end soon? Are we taking $5 trillion annually from Vietnam and Mexico (it's actually the other way around given the vast US trade deficit, we're sending hundreds of billions to the rest of the world)?

Further, the US was the first Capitalist nation. From day one it was heavily built on the principles of the free market and trade, not invasion and plunder. (and before anyone chimes in to loudly proclaim that the US has never been a perfect Capitalist nation: no kidding, such wasn't implied) Otherwise there would be no Canada, at some point in the last century we would have invaded for their natural resources. The US also would have pulled a Russia, and taken Japan and parts of Europe, using its rather wild military & resource advantage at the end of WW2.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#137

Post by [deleted] » Thu, Jan 05, 2017, 6:26 PM UTC

callinyouin wrote: post #4

I'm not planning on Social Security being around by the time I'm old enough to tap into it, and I'm also not planning on having any kids to bail me out when I go senile, so yeah I'm putting a lot into my 401k. I think a lot of people my age (turning 30 next week) are feeling the same way, so I wonder if it's younger workers driving this trend.

[deleted]

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#138

Post by ryandrake » Thu, Jan 05, 2017, 6:26 PM UTC

lucidguppy wrote: post #34

If they take away my social security... I want my payments back.

Social security is not a savings account. It's not "you paying for future you". It's you paying for others now, and later, others will be paying for you.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#139

Post by knz » Thu, Jan 05, 2017, 6:26 PM UTC

chrisabrams wrote: post #75

fortytw2 wrote: post #54

Earlier quoted context omitted.

If it was actually your money, paying into it would be optional.

Bingo! This is the best attitude I have seen in the whole thread. Social Security is an authoritarian play, or a power play. Another way to look at it: if every single US tax payer had to manually pay their taxes, instead of them being auto-drawn from their respective W2 employer, you'd see more people asking the question "who's money is this really?" This is why the fair tax or similar plans will never pass. The pow…

> Social Security is an authoritarian play, or a power play

A more charitable view would be that social security is an attempt to provide a minimum standard of living for all seniors and the disabled. How do you propose that society cares for these people, particularly the disabled, if it's not done at a societal level?

Retirement also benefits the young/middle aged by ensuring jobs open up.

Re: Americans Are Putting Billions More Than Usual in Their 401(k)s

#140

Post by dlp211 » Thu, Jan 05, 2017, 6:27 PM UTC

sikim wrote: post #41

chimeracoder wrote: post #27

Earlier quoted context omitted.

> By having both pre-tax (401k) and post-tax (Roth IRA), you would be also diversifying your tax liability in your retirement. The way your comment is written, it implies that 401(k)s are necessarily pre-tax and IRAs are necessarily post-tax. Both 401(k)s and IRAs come in Traditional and Roth forms, so you could also use pre-tax money for contributing to your IRA, and post-tax money for contributing to your 401(k), o…

Yes, that is correct. I generally prefer to have my 401k all pre-tax (traditional) and my IRA post-tax (roth) to make it easier to manage. Also, this would open doors for backdoor roth IRA contribution once you go over the government's income limit for contributing to IRA, but this is a whole different topic.

There is also the mega-backdoor Roth, but your 401k plan needs to support it.