Congress going to fund stock market New tax?

Maybe as soon as June Congress will pass a law making mandatory that employees put money in a 401 or 403 They got to keep funding the make believe merry go round some how With the big drops and recession coming people will pull out! Oh no can’t cut back on money for them to play with !!!

Before you guys scream I’m dreaming here you go

Geez, you're overthinking it.
As long as they keep printing it, they'll be PLENTY of money!

Yes dave but doesn't mean people have to put it in retirement accounts. It would be a good thing for the generation coming up that never plans ahead. But that's not congress's plan. They want to make sure investors and traders don't loose their jobs if everyone pulls out. No everyone won't pull out but some would be foolish not to before the big fall.......


"No new taxes for anyone making under 400,000 a year" LOL Let's just call it retirement savings .........

A bad day is coming.....when a society becomes soft as mush it falls..

If you’re not already putting money in a 401k, 403b, or whatever your company has available, you’re a fool. Especially if you’re my age. Social security will not be a thing when I’m retirement age, and even if it is retirement age will be 97 1/2 by then. Plan on retiring on your own dime cause there won’t be anything else soon

This is terrible advice. Do not pull your money out. Remember 2008? The ONLY people who lost anything were the ones who got scared and pulled out. Everyone who left their money there now has well over double what they had before the 2008 crash

I'm still in, invested aggressively.
And just retired.

But then again, never was one to put all eggs in one basket.

I'm SURE a savings account at 0.1% would do a better job of keeping up with out of control inflation...

But the point i'm making is the elite Washington law makers are once again out of touch with the working class. Lot of people are living pay check to pay check because of inflation. SO in the middle of this they are going to take another 3% for starters out of someone that is deciding gas or groceries. Then the utility bills ? Some are just trying to make it to retirement. Keep deducting from peoples checks. That's just going to make more want to stop working and play the system.

Those of us who are blessed to have worked all our lives to get ahead and sit back in our paid for homes driving our paid for cars can easily say it's not a problem.

Bob you are right to some extent . But LOT of people didn't have anything left to pull out!!! That was the issue. OR they did like some this time . Borrowed money against a house to invest in a stock market that might crash. Then they must pay back the mortgage and there they will get into trouble.

As much inside trading as they do, it is a wonder it didn't happen sooner.

2008 to now market doubled.

What else has doubled???? Have homes doubled, land doubled and many other costs doubled....has the national debt tripled? Quadruple the amount of money being printed out of thin air backing.....how many more trillion will they print to pay off student loans when they decide in August they need those votes and cancel that debt???

^ these may not be 'exact facts' but you get my drift.

Stock market is a scam imo...ymmv.

Accidental admission that social insecurity won't be there, maybe?

You born again conservatives beating up the Stock market again. Poor working class. I guess you born agains are ok with the the mandated 12.4% of your income you have to put in the Social Security Trust fund. Not that I'm for this new bill.

P.S. 401 k's don't have to be invested in the Stock Market. Of course a portion will.

I don't think anyone is saying 401Ks are bad. Matter of fact smart folks use them or other vehicles to fund retirement.

It's that belief that government can mandate such.

Ask yourself why the government is thinking about doing this? If u think it is because they care about u and me,keep your head in the sand, at this point it's ur best option. Most likely reason I can come up with is country has huge financial situation coming and they are wanting to control more of YOUR money. Keep in mind the government started SS "for your benefit" and look how good of ground its on...... just like everything the government gets involved in.

Exactly!

If government can mandate they can take. Retirement savings should be a purely personal choice even if some will starve in old age.
But I kind of suspect if charity and welfare are also a purely personal choice starvation will be held to a minimum.

Historically low interest rates near or below inflation since 2008 is primarily what has been driving the stock market. Very hard to get out and put your money somewhere else and not lose money. Most of the investment money has to go here to earn a decent return. All that money going there drives up the price of stocks. If the FED actually raises interest rates anywhere near inflation, things will change. Just like 2018.

Wont be long now people will be jumping off buildings after getting ruined like in the dirty 30's
They need to get rid of al the overlapping top heavy money wasting beurocracys and get on with the Basic income for everyone.
Then the cream will rise to the top.

"They" are the top heavy money wasters

First of all let's set aside the tinfoil hats for a minute or two.

I think it's pretty obvious that most Americans are financially illiterate. This, IMO is the root of the problem.

Just an FYI, about 70% of American companies already make these retirement vehicles available on a voluntary basis.

The article does NOT say that ...."Congress will pass a law making mandatory that employees put money in a 401 or 403"
It DOES say EMPLOYERS will be required to set those funds aside. It also says that employees can opt out of the program. Under today's law an employee has to opt IN.

I also fail to see how this is a tax on anyone. It's a tax break FCOL. When you or your employer puts money into your retirement account those funds don't go to the government. They go to your plan administrator, and are invested in your name. You actually are reducing your current tax liability by participating.

I do see how this could be a challenge for low wage employees who can't afford the reduced take-home pay...but they can opt out as long as they are aware of that in a timely manner.

It seems to me the better thing to do is make some financial education required at the high school level. Also, privatize social security. Low wage people pay it already. Let's allow them to invest it in something that will at least grow faster than .5% a year. Of course that will never happen.

The big danger I see with programs and laws like this is that eventually the federal government will also want to dictate what types of things you can invest in. No oil for sure.
Don't be surprised if you ,someday, are forced to buy US Treasury securities in your retirement accounts. Once that happens MMT will be complete. Government will spend without limit and require that the treasury debt is purchased by the same people paying the taxes to service that debt. Then they will tax you on the interest you earned while paying for the debt you were forced to purchase.
A Democrat dream come true

Thank you !! That's my point !! Plus any and everyone replying on this thread has the means to do that . Believe it or not some people are STRUGGLING !!!!!! 3 % out of a person making 12 bucks and hr will hurt if they don't have it to spare.....

Not really a fool. There are other vehicles to put your money into.

White let's say your correct. SOO dems have put another 3% tax on any and ALL businesses that have more than 10 employees. !!??? correct if I read this right. 3 % of the TOTAL employees salaries. ? Yes lot of companies are doing that now. But mom and pop bakerys , shops, and repair services are going to take a hit.

"The Bottom Line
Expectations of profitability, then, remain one of the leading constraints on banks’ ability, or better, willingness, to lend. And it is for this reason that although banks don’t need your money, they do want your money. As noted above, banks lend first and look for reserves later, but they do look for the reserves.

Attracting new customers is one way, if not the cheapest way, to secure those reserves. Indeed, the current targeted fed funds rate—the rate at which banks borrow from each other—is 0% to 0.25% as of June 16, 2021, well above the 0.01% interest rate the Bank of America pays on a standard savings account.56 The banks don’t need your money; it’s just cheaper for them to borrow from you than it is to borrow from other banks."

Where you getting .1?

No. It isn't a tax because the wage-earner still controls it. He isn't paying it out to any government. It is still his.

I think there is a lower limit on the number of employees a business has before this would kick in so lots of mom & pops wouldn't fall under this.

I think it is to everyone's advantage to not have people reach retirement and be destitute. At that point they are a drag on society and the economy. But I don't think it is something that government should mandate.......which they aren't since people can still opt out of the program.

Retirement planning should hurt a little. That is when you are saving the right amount each payday.

Just a couple things to consider...

I believe this is being done to encourage people to save for retirement. You certainly won't be bound to contributing. Rather, you'll simply be enrolled automatically and have to make any changes you see necessary.

If you put 3% into a 401k, the impact to your paycheck with actually be about 2% due to a lower taxable income. If I remember correctly, for every $100 you put in, your check will go down about $65-$70.

Typically, employer have some sort of match which will increase your contribution amount. You're a fool if you're not at least contributing whatever your employer is willing to match.

However, as we've all seen here, fools are aplenty.

Well said Kre

Just another "saltine" from Boco's cracker barrel of knowledge.

Bush had a similar proposal plan and it did not pass and its too bad would have been a good thing.

They are probably trying to bolster the stock market with new money to stave off another recession like 2008 Busch tried the same thing "kind of "when he proposed privatising 1/3 of your social security [wich I think was a good thing ] just prior to 2008 . That massive influx of money would have delayed the 2008 recession at least a little while

Credit union.

Maybe. But I somehow doubt that the 'new money' would be a large enough factor to make more than a ripple in the market.

“We should trust Americans by giving them the option of investing part of their Social Security contributions in private accounts.”


"Having invested so much political capital in this issue, President Bush embarked on the first of what proved to be a long series of tours crammed with events at which he pitched his plan to the people."



"According to the Gallup organization, public disapproval of President Bush’s handling of Social Security rose by 16 points from 48 to 64 percent–between his State of the Union address and June."

People.

Privatized Social Security. That would be a great plan. One way to pull an open check book away from Congress.

Im not convinced there are that many folks that need to decide between gas or groceries. I do think there are a fair shair that may have to decide between cigarettes and groceries, or cable biils and groceries, or the latest IPhone and groceries...you get the idea. As others have mentioned, getting ahead takes some sacrifice, something that many arent willing to do anymore . Id rather have some of these folks be coaxed into saving for their retirement rather than me having to save for mine AND theirs.

Yes, a fool. There are many other investment options, yes, but none available to your average blue collar American that even come close to touching the historical rate of return of a tax advantaged 401k, and if it’s a ROTH 401k you can’t hold a candle to it with any investment other than perhaps real estate, which you have to be VERY good at and have a good deal of money to begin with to get into. For most Americans a 401k is the best investment vehicle

I would be interested in who is lobbying this bill. Almost bet it is hedge fund managers and the banking industry ,

White call it what you want but if it is "mandated" it is a tax in sheeps wool. SS match isn't a "tax" but it is looked at as such because it's mandated. Some businesses won't survive this Mandated NON-TAX
It's 10 or under to not be "FORCED " to pay 3% of a non-tax for the employer......

Pretty sure when I fill out a Schedule SE it says "Self Employment Tax "

: an amount of money that a government requires people to pay according to their income, the value of their property, etc., and that is used to pay for the things done by the government

Maybe it is a contribution?

^^^^^^ yep

"Most people work for someone else, and their Social Security taxes are automatically taken out of their paycheck and sent to the Internal Revenue Service (IRS). When this is the case, the tax gets split between the employee and employer, with each party paying half of what’s owed."

How is it a tax if the the individual still has the funds under his control ? I could see it being called a tax if the money went to the government.

And no one is FORCED to pay a dime if they opt out.

I agree that this would be really expensive for some small businesses to keep track of. Every time they hire a new employee they would need to let him know about the program and also find out whether he wants in or out. Now, what about an employee that quits and goes to work elsewhere ? Does he have to start a new 401k or does the old one go with him ? He and his new plan administrator need to know how much he has already set aside for the year so he doesn't exceed the annual limits. What about the employer match ?

I think that could be an expensive mess for a lot of small businesses. A real can of worms

Could be the first step in mandating a non social security savings plan and looking down the road that may be what is needed to replace the percentage of income for retirement coming from SS. Sure it is mandated but it would be and end run way to begin the privatization aspect of SS, which is what many want to see happen. With higher wages, inflation and SS not adjusting that fast SS will automatically become a smaller portion of most retirees income. Higher incomes get less weight on the bend system or income system used by SS and as wage increases out strip current SS percentages and caps, lower stipend payments are the outcome Is it the right thing to do? Maybe not, but I think most politicians know and believe that with a rapidly increasing older population, our economy will suffer greatly if many don't have incomes that create GDP. Retirees either spend money or wind up transferring wealth and assets.

Bryce

I don't see how pumping money into the stock market staves off a recession. That would require a fair amount of delusion in the economy.

Just smacks of politics and I hate when politicians point to the stock market especially after obvious pumping

Wife had a business for 28 years.
Offered a 401K to employees with a modest match.
Only ONE employee took advantage of it, and she was getting old.

Rest " couldn't afford to" yet many had new cars, took multiple vacations, nails done, latest I-phone, tatoos, $5 coffee every morning and bought lunch everyday.

We sacrificed, maybe too much.
But Old Dave thanks Young Dave.

X2...see my earlier post

These same people will cash out these 401ks first chance they get and blow the money. You can't save people from themselves.

But Uncle Sugar keeps bailing them out.
With OUR money.

Stupid is supposed to hurt!

You can't take money from irresponsible people and give it to responsible people. They don't have any and we don't need it.

I think he's saying it's a tax on the business owners, not the employees. But I didn't read anything that said that the employer had to match the 3%.

Spot on with what I see where I work. We have roughly 300 employees and we only have 43% contributing to a 401K. New hires no longer have a pension so they get dollar for dollar match up to 6%. Those of us that have a pension get 0.50 on the dollar match up to 6%.

I started with the company in 1998 a year out of college at a rate of roughly $18.00 an hour. I made the decision to contribute 15% from the beginning and have done that to date and have never missed it. Even though I have a pension (not the greatest), I did not want to rely on it, social security, or anything or anybody else for my retirement. My plan is to take care of it myself and anything else is a bonus. As others have mentioned there has was a lot of sacrifice early on driving used vehicles, eating left overs in my lunch, and on and on. I believe those sacrifices taught me to live modestly and take care of business, which carried on to later in life by paying of a 30 year mortgage in 14 years and living debt free, but still enjoying myself along the way within reason.

I make a DIY trip to Alaska every year fishing with friends and I always hear the “ it must be nice” from somebody at work every year. Those same people are the ones that always have to have the latest IPhone, trade vehicles every two years, or one example was a close coworker that went out to lunch for fast food every work day. I told him to bring left overs in his lunch every day for a year and use the money he saved to go on the Alaska trip next year.

Maybe... but that's wrong too. If an employee opts out and does not create a 401 K and make contributions...... then there is nothing for the employer to match.

Half the population maybe more doesn't realise that higher corporate taxes are a direct tax on their retirement plans . 1/3 of the money in the stock market is from retirement plans . That's alot of delusion . Pumping money into the stock market maintains the illusion/ delusion . Most people that have a stable job don't eaven realise there is a recession going on until the stock market crashes and they look at their IRA . Then they feel it and it becomes their reality

The market is up almost 5-6 fold since the bottom. Not doubled.

I don't have a 401k type plan, am I stupid lol



The government has no business telling anyone how they should plan for retirement, it doesn't have any business bailing out those who didnt.

Also its only a bill, I haven't followed it but I don't expect it to pass.

If you have one available to you through your job and you’re not taking advantage of it then you are at the very least ignorant.

Nah, I'm not ignorant.

So you think it’s better to pay the government your money in the form of income tax, rather than use your money to make you more money?

^ correct

Personally, I think the 401 stuff was created for bankers, financiers, and not the worker. 401 plans are managed by a finance/ investment type of company that has fees built in. It was a plan to put more money into rich peoples hands and that trickled down in to politician campaign accounts.
That being said I enrolled in 1991 into an employers plan. I was 34 years old. Had a good match for a couple years. Left that company 5 years later being fully vested. Rolled the 401 into an IRA. New employer about 1997 and enrolled in their plan. Left that one in 2005 fully vested again and rolled into the IRA.
New employer but bought a home end of 2005 so no new 401s. Sold the home 2012 with goodly amount of cash at closing. Moved to Fbks. and new home purchased. No 401 till about 2014 maybe. Decent, not great match. Employer went bankrupt April 2020. That employer paid what everyone was owed and I rolled that 401 in to my tradional and my Roth IRAs.
Retired this past March. 65 years old today. Medicare done. Waiting for first SS check/deposit. Life is good. Selling house. Big increase in value and will close with substantial money in my pocket.
Came to Alaska in 1978 and was a wilderness trapper for 8 years. Retired and going back to wilderness trapping!!
Not too sure we can force people to make good decisions. Definitely not convinced the government, or at least democrats, WANTS people to make good decisions!

There are lots of ways to mitigate tax liabilities.

IMHO for the average wage earner the tax saving would be the last reason to be in a traditional 401k. If the company doesn't match a Roth would be better IMHO.

You’re right on that except for the fact that you’re much more limited in the amount you are allowed to invest per year in a Roth IRA. In terms of mitigating tax liabilities and maximum wealth in retirement, a Roth 401k with a match is the best, followed by traditional 401k with a match, followed by Roth IRA, followed by traditional 401k with no match.

Any of those options are better than any other investment vehicle out there with the exception of real estate IF you really know what you’re doing in the real estate world.

I have a traditional 401k, a roth 401k, and a PEBP pension for retirement. I firmly believe SS will not be a thing when I’m retirement age.

This is terrible advice. Do not pull your money out. Remember 2008? The ONLY people who lost anything were the ones who got scared and pulled out. Everyone who left their money there now has well over double what they had before the 2008 crash
[/quote]

I pulled money out. The crash was smaller than I thought it was going to be and took 8 months longer to hit.

I bought my farm cash at a great price it's easily worth 2.5x more than I paid for it regardless of what the markets do its a tangible asset and will not loose much value if any. Especially as they keep building more houses out around me. If I develop it I can easily make 6x my money. Or I can keep it and know I can feed my family and many others off of it.

The crash that's coming will be much deeper and longer than 08.

I can't disagree with your position here Bob but I will add some food for thought......especially for you younger guys.

Back in 2005 I had a traditional IRA. I became convinced that given the state of our government, taxation was likely to be higher, not lower when I decided to retire.

I cashed it out and built a couple of spec houses and sold them. Did better than I would have leaving it alone. Plus, the tax was at the capital gains rate, not ordinary income rate.

My point is, if you believe rates will be higher when you retire and draw on your retirement plans.........you will be far better off with a Roth than any traditional setup