SURVEY SAYS: What About That Democratic Pension Proposal?
This week we asked readers what they thought about a particular aspect of that proposal – the dollar-for-dollar match from the government for the first $1,000 contributed to an IRA, 401(k), or similar plan.
In view of the plethora of choices offered, the complexity of the issue, and the sophistication of the readership, it shouldn’t be surprising that more than 60% of this week’s respondents chose “more than one of the above” – more on that in a moment. The next most popular response was the 11% that said the program would “cost a lot of money,” while about 8% said they wondered what was meant by the “middle- and working-class workers” who would allegedly be helped by the initiative. Roughly 7% said they didn’t expect the program would have any real impact, and another 7% wondered how they were supposed to be able to handle those extra contributions directed to the retirement plans. Less than 5% chose, as a single option anyway, that the proposal would encourage workers to save, about the same number that said it would simply make a lot of financial services providers happy.
As I noted earlier, with so many respondents opting for more than one of the choices – and nearly all of those going so far as to list their multiple choices – I thought it might be interesting to see what that yielded. Still, considering only those who chose multiple outcomes/perspectives, the most common choices remained concerns about how much money the program would cost, and who would really benefit from it. In this subgroup, concerns about how to handle the match were more important, narrowly beating out making financial services providers happy – all of which still beat out those who thought the program would encourage savings (a sizeable number in the more-than-one-choice group thought it would help, but also acknowledged that it would cost a lot of money), albeit by a small margin.
When all was said and done, those who saw little impact from the approach typically cited one of three dynamics: current savings patterns (one reader noted, “In my experience, either people are savers or not.” A nother said, ” It’s pretty difficult to overcome Americans’ shortsightedness when it comes to retirement savings.” ); the experience of the Saver’s Credit ( “The saver’s tax credit is a good example. The income levels are so low, that a qualifying individual can barely make ends meets, much less, unfortunately, contribute to a retirement account,” noted another); and the income levels at which a program of this type would likely be targeted (as one noted, “The targeted group who will get the tax breaks and benefits is also the group who generally understands these opportunities the least, and will have the lowest ability from a financial standpoint to take advantage of them” ).
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One reader summed it all up nicely like this: “All ‘they’ would have to do is take a look at some 401(k) participation rates among middle- and working-class employees (where participants are already offered free money via company match) to determine that the employees that don’t participate due to the lack of available cash flow still won’t participate in this plan, and those that don’t participate due to the fact that they just don’t understand how it works won’t understand this plan either.”
Regarding the targeted beneficiaries, one reader noted, “Anytime the ‘government’ provides a give-away, I start checking to see if my pocketbook is still in my pocket. At least in this one, since I always saw myself in the ‘middle’ and a ‘worker’ and a ‘taxpayer,’ maybe I’ll get to pay myself the $1,000. Of course, since it has to be funneled through the Feds, it will cost me more than $1,000.”
Plan design impacts were a concern of many. As one noted, “I’m concerned that this proposal will cause some small businesses to drop their plans (or perhaps just their match) with the idea – ‘Why should we fund a match if the government is going to do it for us?'”
Another observed, “Hopefully, there will be a provision that will prevent employers who are currently matching contributions from reducing contributions by the match offered by the government. Otherwise, you’d end up back where you started and would discourage saving instead of encourage it.”
There were lots of practical concerns raised about how these contributions would be “directed” to the 401(k) plans. “We have enough problems with our recordkeeper!” exclaimed one. Another echoed, “These are ‘salary reduction’ plans. If it goes through, this really changes everything. And recordkeepers were worried about Roth 401(k)s?!”
A number of readers echoed the sentiments of the reader who said, “Why not use this ‘money’ to ‘strengthen and safeguard’ the Social Security system?”
But this week’s Editor’s Choice goes to the reader who described their status on the matter as “Befuddled. Am I the only one who sees the irony in Democrats opposing personal savings accounts for Social Security reform while at the same time advocating a direct match from the government into personal retirement accounts like IRAs and 401(k)s? Pot, let me introduce you to kettle….”
Thanks to everyone who participated in our survey!
Editor's Note: For the convenience of those who didn't see (or have since forgotten) the original question, since many respondents replied with the letters corresponding to their "pick", was:
Do you (a) think this will encourage middle- and working-class families to save, (b) like the notion, but would rather see a different match/contribution mix, (c) think this will not have much impact, (d) think this will cost a lot of money, (e) expect that this will make a lot of financial advisors/money managers/banks very happy, (f) wonder how you're going to handle these contributions, (g) wonder what is meant by "middle- and working-class workers, (h) none of the above, (i) more than one of the above (which ones)?
And now, on to the Verbatims!
Absolutely (f). These are "salary reduction" plans. If it goes through, this really changes everything. And recordkeepers were worried about Roth 401(k) s?!
I don't believe this proposal will pass and get signed into law in anything resembling its present form. I remember when (was it Jerry Brown or Edmund Muskie?) a similar idea was proposed to give every American $10,000 to stimulate spending as a measure to end our recession.
So why worry about it now? Unless you can tell your readers what the chances are for these proposals to not die in subcommittee or get vetoed later.
Thanks and keep up the good work
OK - call me a cynic. I am "G". The moment I read this, I said to myself, "Just watch. For some reason we'll be excluded because we have two nickels to rub together." So I want to know what the bill terms as "middle and working class" before I'd be on board. And I am shocked that democrats, who feel social security is not in trouble and that 401(k) s are risky, would even want to see money put in a 401(k). Wouldn't a better idea have been to sling an extra $1,000 in each worker's social security fund? I mean, heck, if it's so stable, why not? But, of course, the democrats would actually LOVE to do that because that would be more money for them to spend on vote buying, and, of course, if the recipient dies, the government gets to keep the money. And we all know how REALLY stable social security is, right???
C not much impact. In my experience, either people are savers or not.
Do you
a) Think this will encourage middle- and working-class families to save,
Nope, it's pretty difficult to overcome American's shortsightedness when it comes to retirement savings. Also the confusion of these taxpayers with multiple options is probably just as crippling. The EGTRA Savers credit is still around and gets minor mention at best.
As a registered Dem, I really wish we they would stop mucking around on proposals that clearly won't go anywhere. You want action, publicize the Savers Credit, expand it, anything, just fix what you have rather than grandstanding over proposals that won't go anywhere.
Simplify, Simplify, Simplify:
- Adopt RSA and ERSA (add Profit Sharing component to ERSA) 2. Extend Savers credit to above plans, and make it well known
- Say goodbye to Sep, Simple, 401, 403, 457, PRO, MPP
I think that option c is the most likely. Many "middle class" employees already have an option for a deductible IRA that can be funded in the ensuing year.
In regards to the Survey, I would respond (i) more than one of the above. I think:
a. it will help more lower and middle class families save
d. will cost a lot of money
g. I wonder what is meant by "middle class"
I'd say (f) and (g). Helping people save for retirement is admirable (and politically correct). However, the targeted group who will get the tax breaks and benefits is also the group who generally understands these opportunities the least, and will have the lowest ability from a financial standpoint to take advantage of them. Also, companies - through their plan administrators - will be the ones who will spend the most to comply with a program that will end up being little-used. Redirect the tax incentives to companies for providing decent matches and who encourage savings through the use of auto enrollment and auto increase, and I believe that retirement savings results for this targeted group will be much greater.
d.
Sounds like an enormous taxpayer expense. What will prevent 40-50% of participants from cashing out their accounts including the taxpayer-funded match when they change employers? I haven't read the proposed legislation but I would hope that it includes a provision that prevents this match from ever being cashed out before retirement age. Another government expensive program that probably would not achieve its stated objective -imagine that!
d) Anytime the "government" provides a give-away, I start checking to see if my pocketbook is still in my pocket. At least in this one, since I always saw myself in the "middle" and a "worker" and a "taxpayer", maybe I'll get to pay myself the $1,000. Of course, since it has to be funneled through the Feds, it will cost me more than $1,000. I guess that it's worth it so our legislators can pat their backs and show the voters at election time what a great deal "they" have given them.
The travesty is that the 30% who don't already participate in our plans, even though there is already a lucrative match, will not contribute the $1,000. Even if they do, they will probably borrow or early withdraw it, so the effect on "retirement" savings for those who need it most will be negligible.
Maybe our legislators should use the money to encourage DB plans, so these non-savers will have something for retirement...oh wait, there I go reverting back to Jurassic Park with my quill pen.
(d) Although I don't quite understand how it will work. Is this another Democrat "give-away" program? Who will ultimately "pay" for the matching contribution that the "government" will give away? The taxpayers? I don't think people will take advantage of this. We have a great matching dollars 401K program at work and hardly anyone takes advantage of this "free" money that our COMPANY pays for. Too many people have credit card debt and live paycheck to paycheck, and don't understand that they would actually be rewarded with "free money", by putting money away in their 401K.
Personally (g) wonder what is meant by "middle- and working-class workers??"
Although I think professionally
(f) Wonder how you're going to handle these matching contributions that will be directed to your 401(k) plan will be quite an issue. I assume it will be a new money type for an allocation and are companies/participants charged fees based on money type at least in part for recordkeeping? And what happens if someone withdraws the money the government match was based on (is there a restricted time frame and if so how monitored), or takes a loan? What kind of reporting will be involved since I would assume someone will have to report to the government on this. Will there be 5500 impact or a separate IRS report? The mechanics of this could be quite interesting but then again there would be all that extra money for companies to invest and earn money on.
As for the cost issue, it depends on if I pay more than I get, whether or not I'm concerned about how much it will cost.
Answer (i), more than one of the above.
(d) It will be very expensive. Just giving money to taxpayers? Who is paying for this? Oh yeah, taxpayers. Maybe it will be "other" taxpayers, but don't count on it. Which has the better efficiency: saving $2000, or saving $1000 and paying another $1000 in taxes so Uncle Sam can give it back to me? Not only is this idiotic, but it is designed to increase governmental control over another aspect of our lives. The next step will be the government telling us how we can invest the matching contribution, closely followed by the govt. telling us how we can invest our own contribution.
Also at least some degree of truth in answers (a) and (e) and (f) and (g).
Also, keeping fraud out of this govt. program will be impossible.
It's a nice benefit to those who save, but another program to administer. Therefore (i) a,d,e,f & g
h) I'm concerned that this proposal will cause some small businesses to drop their plans (or perhaps just their match) with the idea - "why should we fund a match if the government is going to do it for us" and may cause some confusion on lower-income workers who are in plans with a less attractive match than $1/$1 and will need to decide if they should participate in the government plan to get the higher match.
(i) - all of the above. Too much potential confusion. Also, too high a probable cost due to the intrinsic expense of anything the government does. Instead of this "matching" contribution why not just provide a TAX CREDIT at time of filing with eligibility mirroring Roth IRA AGI levels?
Of most concern is letter (f)...likely to make plan administration more difficult...how will company sponsored plans receive the matching contributions from the government and then post them to participant accounts...how will companies explain the matching contribution provisions of the plan...having to explain a government match and how it is different from a company match (if they continue to offer a company match). Will this legislation result in a reduction in company matching? If the final legislation only provides the government match to IRA's it would be cleaner....if a person earns less than approximately $35,000 and the company matching provision is 50% of the 1st 6% of employee contribution (a common level of match)...the new government match to an IRA would probably result in a higher match. This whole concept might be even better if the government match went into a Roth IRA.....
(d), (e), (f), (g) & (h) - unbelievable. Another example of feel-good democrats trying to fix our social injustices by doling out money that isn't really theirs. There are easier ways to re-allocate wealth. Let's not add more complexity to 401(k) plans, tax codes, and tax returns that are already overwhelming. My take - this will be a windfall for those already participating and will encourage very few of those not participating (i.e.: not saving) to start.
A. Maybe some, but if employees are not signing up for a 401k with an even more generous match, I doubt the impact.
B. Don't we have enough trouble already with funding social security?
C. See A
D. Cost will depend on impact, not huge in terms of gov't expenditures.
E. sure
F. of course
G. impossible to be fair on this, $50k in Des Moines is very different from $50k in Manhattan.
H. We need smaller government and more personal responsibility! Enough already with the hand holding.
First of all I want to say how happy I am that the Democrats have at least proposed something in this area. That said, the dollar for dollar match is not much different than giving nearly everyone a tax refund as was done a few years back by the Bush administration, so I can't see the harm there. If it will go into a tax deferred retirement plan, so much the better. When Bush sent everyone a check it was usually so little that it was immediately spent, and at the time, that was the intention, to help jump-start the economy. I think this will be an added incentive for many to save for retirement. The government has always used the tax code to incentivize the behaviors that it wants to encourage.
So my answers are: a) think this will encourage middle- and working-class families to save, (d) think this will cost a lot of money, (e) expect that this will make a lot of financial advisors/money managers/banks very happy, (f) wonder how you're going to handle these matching contributions that will be directed to your
401(k) plan.
The last one is the most interesting question - what will we do with the money and how will it be treated for vesting for discrimination testing etc.?
I would have to answer (i) for (d) and (g) to the survey below. It's going to cost a ton of money to implement, even more to keep it going. Also, the government has always found a way to consider a cop and a nurse that have a dual income but still only bring down $60K per year as "wealthy". I don't think that the Robin-Hood approach to retirement savings is a good idea at all. The government should not be in the business of creating mechanisms to redistribute the wealth. All "they" would have to do is take a look at some 401(k) participation rates among middle and working class employees (where participants are already offered free money via company match) to determine that the employees that don't participate due to the lack of available cash flow still won't participate in this plan, and those that don't participate due to the fact that they just don't understand how it works won't understand this plan either. The $1,000 that they are matching should be taken from what we are already forced to save for Social Security. They can then put that in an individual account and match it all they want. Am I the only one that doesn't trust the government with my money?
(f) Wonder how you're going to handle these matching contributions that will be directed to your 401(k) plan,
Will taxpayers have a line on their 1040s to fill in with the
name of their 401k plan or IRA?????
I'd be interested to see if the eligibility of similar to
IRAs with a sliding income scale as well.
a,d,f,g
This should encourage some savings but I think it will be those that are already planning ahead that will benefit. Those that are not currently saving will continue down that path. That being said, I think it will be expensive but that will depend on what income level is eligible for this matching contributions.
My other concern is our 401k match is "only" 50%
- my concern is employees that currently are contributing at
the $1,000 - $2,000 level may discontinue participation in
our plan to get the higher match and then I will have
problems with discrimination testing, etc.
This is just another democratic response that really doesn't offer a lot of solutions for the retirement savings dilemma. Given that, I would have to select (i) - More than one of the above:
First I should start with (g) in that I wonder what the limits will be on "middle, working-class worker". Depending on what those limits are will then have an impact on (a) or (c). If the limits are workers with incomes of only $35,000 or lower I then would pick (c). Workers with incomes in that range or less cannot afford to contribute to their 401(k) plan now to the maximum that employers allow to receive the maximum match. There won't be much impact if the limit on the wages is in that range. If the range is higher, say up to $100,000 then there will be a larger impact obviously (a).
Secondly, working for a financial institution (e) would be an obvious answer. If the bill passes with the tax credit for small businesses to provide 401(k) plans then all banks and other financial institutions will benefit from this proposal. Also, automatic enrollment will improve the assets of the accounts, thus improving the fee income for the financial institutions.
And finally, (d) and (f). This proposal will cost the government (us taxpayers) a lot of money. Where do the Democrats think the funding for this is coming from? With this quote from the Nancy Pelosi "Democrats are fighting to strengthen and safeguard Social Security's guaranteed benefit. In addition, more must be done so that every American has the opportunity to build a secure retirement." why not use this "money" to "strengthen and safeguard" the Social Security system, but that would mean the Democrats would have to work with the Republicans to figure out how to save SS. This is just another diversion of the Democrats. And (f) how in the world will this money be placed in each company's 401(k) accounts or individual IRA's? We all know the government is very quick with responding, so then what about the missed opportunities on this money while the government is holding the funds before they are deposited in your accounts. Talk about an administrative nightmare! Glad I don't deal with this directly anymore. I just plan the communications!
In some instances, it may encourage more saving from the upper middle working class. Unfortunately, it still leaves a struggling family trying to weigh the choices of providing necessities to the family or saving for a far off retirement.
This will cost tax payers a lot of money in the long run. Who will ultimately be paying the cost?
Hopefully, there will be a provision that will prevent employers who are currently matching contributions, not to reduce contributions by the match offered by the government. Otherwise, you'd end up back where you started and would discourage saving instead of encourage it.
The real winners, in the short term, would be the financial advisors, brokers and bankers if the savings came off as expected; more people saving, more money matching, more investments for the financial realm to get fees from.
my feeling is that 'e' this 'f'' most people don't comprehend how to invest their contributions in various funds now, so I see this as only confusing them more...and finally 'g', it always seems to be presented to assist the 'middle-and working-class workers', but somehow ends up being bigger benefits for 'upper-class workers'....makes you go ...hmmm.....
My answer is all of the above except that I don't think the cost is going to be very big in relation to any number of large corporate subsidies, such as the recently proposed additional tax credits for big oil companies.
All of the above.
This will be more confusion. Some of these folks would not have clue what to do with the money and would not doubt empty the account at the first chance (they need to bring back Al Gore's lockbox to hold these account so no one can w/d from them)
Every day I read about the high % of participants take distributions when they leave a company. There needs to be a wall of eliminating most of these distributions. The entire rollover process needs to be automated. Auto enrollment, et al needs to include auto rollover of your prior account balance as well.
(c) Think this will not have much impact. IRA savers save without this incentive. Non savers won't care about the match.
I think it is bogus. The Democrats need to help fix Social Security. Send the $1,000 to the social security system if they want to blow more tax dollars. Otherwise, quit raiding social security and forget the $1,000 give away.
I would answer (i), and my selections would be (a), (d), and (e). If I was not already in a 401(k) plan and had to make a $1,000 contribution in order to get the government match, I would find a way (even if I had no apparent means of doing so). $1,000 is $1,000. This would certainly get current non-savers to save. However, it would also seem costly from a government perspective.
Our answer is (i), which is a combination of (f) and (g). In the words of one coworker, "this just screams administrative nightmare". Will the government be sending $1,000 checks to eligible participants (whomever they may be) or directly to the plan sponsors? Is this "match" 100% vested immediately? What are the withdrawal restrictions? We think a simple tax credit would be much easier.
Regarding the dollar-for-dollar match, I think (i) is the correct answer made up of (d) it will cost a lot of money (f) wonder how we'll handle these contributions (g) wonder what is meant by "middle- and working-class workers" and (h) what happens if your company is already providing a matching contribution? Does the government match get reduced by the company match or will you get both matches?
(h) None of the above
Think it's time that politicians stop their cynical grandstanding on retirement issues and begin a serious dialogue on these issues. We need responsible proposals, not symbolic representations and talking points aimed at tested demographic groups, from both parties.
I'm a life-long liberal Democrat who is very cynical about Social Security "Reform," but this looks like a ploy by Democrats to re-position themselves as champions of "middle- and working-class families."
Have fun reading all of today's rants
Do you (a) think this will encourage middle- and working-class families to save, YES
(b) like the notion, but would rather see a different match/contribution mix, NO - I LIKE THE 100% MATCH
(c) Think this will not have much impact, I THINK THIS WILL HAVE A POSITIVE IMPACT, ESPECIALLY ON THE YOUNGER GENERATION OF SAVERS
(d) Think this will cost a lot of money, YES
(e) Expect that this will make a lot of financial advisors/money managers/banks very happy, YES
(f) Wonder how you're going to handle these matching contributions that will be directed to your
401(k) plan, NO
(g) Wonder what is meant by "middle- and working-class workers", ABSOLUTELY
I must admit I think there will be costs, there will be happy financial advisors, I wonder who the middle and working class workers will be, personally, I think if it is match money everyone should get it regardless of income in all fairness.
My first thought was that there will be $1000 more dollars for the working middle class to withdrawal via hardship withdrawals ( if the plan allows it) so does it really help encourage that group to save for their retirement in the long run?
Survey Response:
(H) Befuddled. Am I the only one who sees the irony in Democrats opposing personal savings accounts for Social Security reform while at the same time advocating a direct match from the government into personal retirement accounts like IRAs and 401(k) s? Pot, let me introduce you to kettle....
First impulse is to say (a) it will help, because yes it will a lot.
However, you offer too many other interesting points that one would also like (i) so one can also ask (g) what is middle class working class anyway? Also mention (d) it will cost a lot of money, but you and I (the middle/working class) will have the money as opposed to stealing form Social Security via the "GROW" accounts (let's see Social Security will run out of money in the future, so lets steal what whatever surplus is there today and tomorrow and make Social Security go bankrupt today, sound like a "turd blossom" to me), or the worst using it to kill Iraqis and Americans. Hey we can use the $100 million we cut from domestic transportation security. There's no danger to trains and buses anyway.
(i) More than one of the above (which ones)?
(c) Think this will not have much impact [Our plan offers a match of 100% of the first 5% contributed with immediate vesting, and we still have lousy participation! Why not try to focus some of this energy into Social Security reform!? Anyone know how many taxpayers have actually used the low-income tax credit vs. how many qualify for the credit?]
(d) Think this will cost a lot of money
(f) Wonder how you're going to handle these matching contributions that will be directed to your
401(k) plan [We have enough problems with our recordkeeper!]
(g) Wonder what is meant by "middle- and working-class workers"
I'm going to have to go with (i) more than one of the above. Specifically, I (d) think this will cost a lot of money, (e) expect that this will make a lot of financial advisors/money managers/banks very happy, (f) wonder how you're going to handle these matching contributions that will be directed to your 401(k) plan, (g) wonder what is meant by "middle- and working-class workers" and (a) HOPE this will encourage middle- and working-class families to save.
I wonder, though, if the match made after you file your taxes will offer the same incentive as an employer match funded each payroll—where they see that match going in month after month. While it will undoubtedly entice some additional workers to save, I am afraid the deferred nature of the match will not have quite the same impact on participation rates as it would if it were funded (and visible) on an ongoing basis.
Just my two cents' worth.
Regarding the dollar-for-dollar match, I think (i) is the correct answer made up of (d) it will cost a lot of money (f) wonder how we'll handle these contributions (g) wonder what is meant by "middle- and working-class workers" and (h) what happens if your company is already providing a matching contribution? Does the government match get reduced by the company match or will you get both matches?
I would go for me, more then one above, c, d, e and g. I believe this is a waste of taxpayer dollars. You can lead a horse to water, but cannot make them drink. Automatic enrollment would do more good. I would most likely qualify; however, being in the industry, (auditor of pension plans) it would be a waste of time.
I (g) wonder what is meant by middle- and working-class workers" then I (f) wonder how youre going to handle these matching contributions that will be directed to your 401(k) plan. Mostly, I think that participants who are likely to contribute will continue to contribute with an additional $1000 now. But for the many "middle- and working-class workers" without an employer sponsored plan, I think they're still faced with the same hurdle of going out and finding their own IRA that they can contribute to.
How did that saver's credit work out? Oh yeah, I haven't heard anything about it since it was the latest, greatest idea on getting people to save.
I'll have to go with (i) because I'm confident that we will end up with some legislation, otherwise I would go with (h) only....
(a) Yes, people will definitely take advantage of the $1,000 match although it won't really encourage savings, because they will probably borrow it as soon as they can to buy a new car, boat, quarter horse....
(d) It will cost money...
(e) Oh yea!
(f) here's the cost
(g) More cost
(h) I'm of the belief that the voluntary income tax withholding is unconstitutional. If I could keep all my money in the first place, I would be better off financially, able to save for my future and save costs by not having to file paperwork to get my money back.
More than one, of course. A - Yes I do believe it will encourage more participation (especially since our company does not have a per pay period match); D - it's going to cost and where is the money going to come from; and F - how in the world are we going to handle these matching contributions! And just to add to the confusion, will these contributions be available to the participants via 401k loans, hardship withdrawals? Will there be limitations on cash out provisions when employment is terminated? Sounds like job security to me!
Having been in all aspects of this business for over twenty-five years, I think history will repeat and few individuals who have not contributed in the past will contribute in the future, just for some tax incentive. It still means the individual must come up with the initial contribution, and many are unwilling or unable to.
The saver's tax credit is a good example. The income levels are so low, that a qualifying individual can barely make ends meets, much less, unfortunately, contribute to a retirement account.
Once again it is a policy written by millionaires who "automatically" give themselves salary increases, who have no concept about what the average taxpayer is able to do.
It makes no difference which political party puts forward a plan, the bottom line is, the very people they are trying to help cannot afford to contribute to a retirement plan.
Will this policy helps those? Likely not!
(a) no, (b) no, (c) definitely will not have much impact, (d) yes, (e) who cares? (f) I wonder how the GOVERNMENT is going to handle directing matching contributions into my 401(k) plan (g) Not only do I wonder what is meant by "middle- and working-class workers", I wonder what is meant by "upper income taxpayers" who the House Democrats say will pay for their program. (h) & (i) see above comments.
I think it is interesting that the federal government is now proposing to enter the "retirement matching" business.
Companies been providing (and "matching") retirement benefits to employees for years... defined benefit (mostly company money), defined contributions (many with matching features), social security "matching", etc...
I guess these Democrats feel an obligation to allow taxpayers another way to "keep some of our own money" through this proposal.
It seems to me we have been hearing our President say something "similar" for several years now.
I am all for "keeping some more of my own money" and if the outcome of this proposal permits that to happen, I will take a "match" or "send less to the government", or whatever terminology is finalized, if they result is the same....more of my money invested as I want it to be invested for my future and that of my family....
How can anybody not be for this??
Several apply. The mechanics of this are yet to be worked out by those of us in the trenches. The most obvious is the timing issue. If the contribution does not occur until after the return is filed, what if the person has quit and fully distributed? Where does the money go? Does it go to the person? Former employer? Provider?
I also think this is very expensive. This is like a front-loaded social security benefit. Where does the money come from? The low-middle income folks aren't paying enough taxes that a potential $1000 per tax payer refund is huge.