Greased by lobbying and campaign cash, tax breaks for retirement savings are one thing Congress agrees on. But they also blow out the deficit and add to income inequality.

Five months before Congress faced a near-catastrophic standoff over the debt ceiling, with Republicans demanding restrictions to food and Medicaid programs to rein in spending, a bill that raised the cost of private retirement savings accounts to $282 billion per year was quietly signed into law.

In this era of deeply divided politics, the 2022 bill known as Secure 2.0 was hailed as a bipartisan success — a victory for average Americans. It had sailed through the House by a whopping 414-5 vote. It followed four other major bills passed between 1996 and 2019 that dramatically expanded taxpayer savings – all equally lauded as bipartisan victories.

But that rare issue that brought a divided Washington together also increased wealth disparities and the federal deficit. And the victory was most strongly applauded by the burgeoning financial services industry, for whom tax-advantaged retirement savings has transformed a $7 trillion retirement market in 1995 to a $38.4 trillion behemoth in 2023.

  • Xbeam@lemmy.world
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    5 months ago

    If you work for a company that has a 401k then you need to sign up for it. If the company has a match percentage then that is the absolute minimum you should contribute. And when you are younger you should set it up as a Roth so you pay taxes on it now.

    This isn’t a thing you should do at a certain age. The younger you start the better. The money just comes out of your paycheck, same as taxes.

    • Flying Squid@lemmy.world
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      5 months ago

      I do not work for a company that offers such a thing. And I never have.

      This is what I’m saying about assumptions.

      • gorysubparbagel@lemmy.world
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        5 months ago

        You can sign up for a Roth IRA then, there’s no need for anything from your employer to get one. As far as I recall there’s no minimum amount of money you need to put in at start.

        • bhmnscmm@lemmy.world
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          5 months ago

          I don’t know why you’re being down voted. I swear, some people would rather complain than make the smallest effort to help themselves. It’s good advice.

          Even very small contributions to a retirement account can make a big difference in old age.