Comments on: Killing off the 401(k), one CSPAN call-in program at a time http://curiouscapitalist.blogs.time.com/2008/12/21/killing-off-the-401k-one-cspan-call-in-program-at-a-time/ Commentary on the economy, the markets, and business Sat, 28 Nov 2009 23:56:37 +0000 http://wordpress.com/ hourly 1 By: curmudgeon57 http://curiouscapitalist.blogs.time.com/2008/12/21/killing-off-the-401k-one-cspan-call-in-program-at-a-time/comment-page-1/#comment-12411 curmudgeon57 Mon, 22 Dec 2008 13:06:10 +0000 http://curiouscapitalist.blogs.time.com/?p=3702#comment-12411 @Justin: Of course you're correct, and I didn't mean to imply that my existing money would be taken from me. I meant that my ability to be prudent would have brought me little lifetime advantage over those without such an ability. So much for the fairy tales we were read when young. - The tax treatment is an interesting angle, isn't it? In exchange for more than a miniscule pension, the 401K holder gives up all future tax-advantaged rights, for example. That would be a tough pill to swallow, but as recent events have shown, there seem to be far more people who need a government bailout than not. @Justin: Of course you're correct, and I didn't mean to imply that my existing money would be taken from me. I meant that my ability to be prudent would have brought me little lifetime advantage over those without such an ability. So much for the fairy tales we were read when young.
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The tax treatment is an interesting angle, isn't it? In exchange for more than a miniscule pension, the 401K holder gives up all future tax-advantaged rights, for example. That would be a tough pill to swallow, but as recent events have shown, there seem to be far more people who need a government bailout than not.

]]> By: Justin Fox http://curiouscapitalist.blogs.time.com/2008/12/21/killing-off-the-401k-one-cspan-call-in-program-at-a-time/comment-page-1/#comment-12410 Justin Fox Mon, 22 Dec 2008 01:31:29 +0000 http://curiouscapitalist.blogs.time.com/?p=3702#comment-12410 @curmudgeon57: There's no way they'd do anything to your existing 401(k) account. It's really more a question of tax treatment for 401(k) contributions going forward. @Sean DeCoursey forgot his password: It seems like the strongest point of the 401(k) is it's much less connected to an individual job than pensions and health insurance are. I guess the quality of the 401(k) plan can vary a lot among employers, but at least the money can be moved from job to job. @curmudgeon57: There's no way they'd do anything to your existing 401(k) account. It's really more a question of tax treatment for 401(k) contributions going forward.

@Sean DeCoursey forgot his password: It seems like the strongest point of the 401(k) is it's much less connected to an individual job than pensions and health insurance are. I guess the quality of the 401(k) plan can vary a lot among employers, but at least the money can be moved from job to job.

]]> By: curmudgeon57 http://curiouscapitalist.blogs.time.com/2008/12/21/killing-off-the-401k-one-cspan-call-in-program-at-a-time/comment-page-1/#comment-12409 curmudgeon57 Sun, 21 Dec 2008 23:03:06 +0000 http://curiouscapitalist.blogs.time.com/?p=3702#comment-12409 Having spent the entirety of my working life under 401K plans (no modern company has started a pension plan in a long time), I'm a bit biased. Getting rid of 401K seems to be changing the rules within a few years of my getting out of the game, and hardly seems fair. I saved more than the average bear, and my prudence (supposedly a desired quality) may be rewarded by a national admission that such prudence over the course of a working career was a fool's game. - @Sean: The national pension plan is actually social security, but that is little more than a shell game. To some extent, pensions have to be associated with contributions to society, but you're right, they don't have to be managed by the employer. Yet I'm hardly convinced that the government can do better. Having spent the entirety of my working life under 401K plans (no modern company has started a pension plan in a long time), I'm a bit biased. Getting rid of 401K seems to be changing the rules within a few years of my getting out of the game, and hardly seems fair. I saved more than the average bear, and my prudence (supposedly a desired quality) may be rewarded by a national admission that such prudence over the course of a working career was a fool's game.
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@Sean: The national pension plan is actually social security, but that is little more than a shell game. To some extent, pensions have to be associated with contributions to society, but you're right, they don't have to be managed by the employer. Yet I'm hardly convinced that the government can do better.

]]> By: Sean DeCoursey forgot his password http://curiouscapitalist.blogs.time.com/2008/12/21/killing-off-the-401k-one-cspan-call-in-program-at-a-time/comment-page-1/#comment-12408 Sean DeCoursey forgot his password Sun, 21 Dec 2008 22:08:32 +0000 http://curiouscapitalist.blogs.time.com/?p=3702#comment-12408 The real problem with 401(k), medical insurance and pension plans is that they're all tied to your job. And all were set up with two, basic, massive flaws. - 1. No one stays in the same job with the same company forever anymore. Or at least the majority of workers don't. - 2. This makes every company on the planet do a bunch of stuff that isn't in their core group of business skills. i.e., it makes manufacturers into health providers and turns IT/Software companies into institutional investment and financial planning firms. - To really fix health care and retirement they have to separated from work. Until that happens you're just dressing sheep up like sheepdogs. The real problem with 401(k), medical insurance and pension plans is that they're all tied to your job. And all were set up with two, basic, massive flaws.
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1. No one stays in the same job with the same company forever anymore. Or at least the majority of workers don't.
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2. This makes every company on the planet do a bunch of stuff that isn't in their core group of business skills. i.e., it makes manufacturers into health providers and turns IT/Software companies into institutional investment and financial planning firms.
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To really fix health care and retirement they have to separated from work. Until that happens you're just dressing sheep up like sheepdogs.

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