this post was submitted on 13 Apr 2024
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politics

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[–] [email protected] 5 points 7 months ago (5 children)

If someone could explain how this doesn't benefit the working class as everyone with a full-time job should have a 401k?

[–] [email protected] 12 points 6 months ago (1 children)

Because it's overcomplicated, the barrier to entry is significant, and we blame its problems on the consumer as "financial literacy". Just over half of workers actually have one, and most of them are mismanaged by third parties lobbying for more complexity.

[–] [email protected] -3 points 6 months ago (1 children)

This is still benefiting just over half of workers, not billionaires.

[–] [email protected] 2 points 6 months ago

The billionaires own those third parties.

[–] [email protected] 9 points 6 months ago* (last edited 6 months ago)

I’m a software engineer and have had multiple startup employers not provide a 401k. It’s actually much more common than you think to not have one at all. Only 56% of employers have a 401k.

It’s even more common to have no matching. Of the 56% that have a 401k only 50% have any matching at all. This leaves less than 25% of employers with matching.

Of my 3 employers who did not have a 401k they all compensated me in mostly equity. Only a single employer had their equity eventually pay out in some form and it’s not eligible to be put in retirement funds outside of the standard IRA which maxes out significantly less than that 401k

[–] [email protected] 3 points 6 months ago

Its just this attitude that allows the 401k middlemen to exploit the market and influence our government. People think it benefits them, but it really benefits other people more.

[–] [email protected] 3 points 6 months ago

Have to be able to save money to use a 401k

[–] [email protected] 2 points 6 months ago* (last edited 6 months ago) (1 children)

Because you can hide hundreds of thousands annually in there. No working class individual makes that much. That money should be taxed

Edit: since people seem confused by the lack of clarity, copying my reply from below:

In a 401k? Yes. But if you read the article:

Today, wealthy taxpayers can protect up to $452,500 per year in tax-advantaged accounts in a single year, saving up to $203,600 on their taxes. And they can keep their money in tax-advantaged accounts far longer.

There are many types of tax-advantaged accounts.

https://www.investopedia.com/terms/t/tax-advantaged.asp

[–] [email protected] 1 points 6 months ago (2 children)

23k is the max annual contribution. The money is taxed upon withdrawal. It’s not “hidden”.

[–] [email protected] 2 points 6 months ago

In a 401k? Yes. But if you read the article:

Today, wealthy taxpayers can protect up to $452,500 per year in tax-advantaged accounts in a single year, saving up to $203,600 on their taxes. And they can keep their money in tax-advantaged accounts far longer.

There are many types of tax-advantaged accounts.

https://www.investopedia.com/terms/t/tax-advantaged.asp

[–] [email protected] 1 points 6 months ago

23k is the max annual contribution

If you're over 50, you can put $30,500 in your 401k, the extra $7500 per year is called a 'catch-up contribution'