A significant portion of Boomer wealth is in retirement plans such as 401(k)s and the like. The SECURE Act will force the distribution of all traditional plans (before-tax) within ten years of death when the beneficiary is not a spouse. The government will receive a windfall in taxes, particularly when the kids are high-income and live i…
A significant portion of Boomer wealth is in retirement plans such as 401(k)s and the like. The SECURE Act will force the distribution of all traditional plans (before-tax) within ten years of death when the beneficiary is not a spouse. The government will receive a windfall in taxes, particularly when the kids are high-income and live in high-tax states.
Government windfalls do not translate into better outcomes for the less wealthy though . Neither does looking at wealth gaps help anyone when there are so many people with no wealth at all. There is no single answer, but ensuring that all workers had a retirement plan would mean far fewer people with nothing but the clothes on their backs. There would also be far fewer people with no inheritance.
There are multiple avenues to accomplish this. The savings component of the Federal Employee Retirement System could be opened to everyone who pays Social Security taxes. Banks, brokers, and insurance companies would strongly oppose this. Voters would also oppose it since all candidates must pledge to not « touch Social Security » if the are to be elected. I read those pledges as promising not to « fix Social Security. »
Another alternative that evades these problems is to require savings plans to be a part of employment. The government could provide the standard contract as they do with SEP plans, downloadable from IRS.gov. This is not a huge burden on employers and would eliminate most of the objections of the financial industry and the « don’t fix Social Security » crowd.
It would be better to have some savings for more people than to fixate on how much more some people have, particularly since SECURE already heavily taxes a vast portion of it.
A significant portion of Boomer wealth is in retirement plans such as 401(k)s and the like. The SECURE Act will force the distribution of all traditional plans (before-tax) within ten years of death when the beneficiary is not a spouse. The government will receive a windfall in taxes, particularly when the kids are high-income and live in high-tax states.
Government windfalls do not translate into better outcomes for the less wealthy though . Neither does looking at wealth gaps help anyone when there are so many people with no wealth at all. There is no single answer, but ensuring that all workers had a retirement plan would mean far fewer people with nothing but the clothes on their backs. There would also be far fewer people with no inheritance.
There are multiple avenues to accomplish this. The savings component of the Federal Employee Retirement System could be opened to everyone who pays Social Security taxes. Banks, brokers, and insurance companies would strongly oppose this. Voters would also oppose it since all candidates must pledge to not « touch Social Security » if the are to be elected. I read those pledges as promising not to « fix Social Security. »
Another alternative that evades these problems is to require savings plans to be a part of employment. The government could provide the standard contract as they do with SEP plans, downloadable from IRS.gov. This is not a huge burden on employers and would eliminate most of the objections of the financial industry and the « don’t fix Social Security » crowd.
It would be better to have some savings for more people than to fixate on how much more some people have, particularly since SECURE already heavily taxes a vast portion of it.