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tony

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  1. O.K Steve. I am done posting.
  2. A bit heavy and involved but some of you might enjoy. http://www.aaii.com/journal/article/the-impact-of-expense-ratios-on-retirement-income
  3. Thanks for letting me know https://www.bespokepremium.com/think-big-blog/politics-and-investing-keep-them-separate/
  4. Here is the article. Ted Benna, father of the 401(k), thinks tax reform that favors Roths is 'pretty stupid' Ted Benna, widely known as the father of the 401(k) plan, believes an idea being debated in Washington to lessen the pre-tax contributions workers can make to a retirement plan is "pretty stupid." Mr. Benna was a pioneer of the 401(k) plan, having developed the concept of pre-tax 401(k) deferrals. He adopted the first-ever 401(k) savings plan in 1981 for the Johnson Companies, where he worked as a retirement benefit consultant. Now, debate is swirling on Capitol Hill to reduce the pre-tax contribution limit from the current $18,000 annual limit as part of a Republican tax-reform package set to be unveiled this week. Any contributions beyond the pre-tax limit would be mandated to go to Roth, or after-tax, accounts, a policy known as "Rothification." "I think it's pretty stupid in terms of retirement policy," Mr. Benna, now a consultant at an eponymous firm, told InvestmentNews. "There's major concern about a retirement crisis that's staring us in the face. [The 401(k) plan] is the plan, whether people like it or hate it, that's the primary way for the average American to be saving for retirement." The issue has generated fierce debate on its merits, fueled last week by the public spat between President Donald J. Trump and Rep. Kevin Brady, chairman of the House Ways and Means Committee. Mr. Trump said on Twitter that there would be "NO change to your 401(k)," calling them a "great and popular" tax break for the middle class. Mr. Brady signaled that proposals to limit the 401(k) tax break were on the table. While details are scant on the final form of any proposed tax legislation, reports have indicated a pre-tax contribution threshold of $2,400. Because Roth accounts, in which individuals pay taxes now instead of at retirement, accelerate 401(k) tax revenues inside the 10-year window officials use to judge the monetary impact of tax legislation, it's broadly seen as a way to offset some of the revenue that will be lost to Republicans' desired corporate and individual tax cuts. Mr. Benna, like many other opponents of such an idea, contend the upfront traditional 401(k) tax break provides a large benefit to middle-income Americans, who would likely save less as a result of a shift to Roth accounts. He also argued the middle class carries a greater burden relative to lower-income earners to replace their income in retirement, and therefore the upfront tax break is reasonable. Social Security, for example, doesn't replace as much of a middle-income worker's pre-retirement income, on a percentage basis, as a lower-income worker, he said. In other words, the middle class needs to save more money on a percentage basis to get to a level like 70% income replacement in retirement, a widely cited level of retirement preparedness. "They have a bigger gap, which is why it's reasonable giving the tax break, to help them get there," Mr. Benna said. "They have more of a burden to get to an adequate standard of living." Some observers, such as renowned behavioral economist Richard Thaler, have taken a contrary position: that a reduction in the pre-tax limit would mostly affect the wealthy, not middle America. "Unpopular observation: reducing the limit on 401k contributions is massively progressive," Mr. Thaler, the recipient of this year's Nobel Prize in Economics, said Oct. 25 on Twitter. Mr. Thaler has had an enormous impact on retirement savings, through concepts such as "nudging" employees to join retirement plans via automatic enrollment. In a follow-up tweet, he equated the current pre-tax savings structure to a "tax shelter" for the rich, which allows them to save more money and earn a bigger tax subsidy from the government. "Very few max out," he tweeted.
  5. http://www.investmentnews.com/article/20171030/FREE/171039994/ted-benna-father-of-the-401-k-thinks-tax-reform-that-favors-roths-is
  6. http://www.philly.com/philly/business/vanguard-greatly-concerned-over-changes-like-congress-proposed-cap-on-401k-plans-20171030.html
  7. https://www.bespokepremium.com/think-big-blog/politics-and-investing-keep-them-separate/ Politics and Investing: Keep Them Separate | Bespoke Investment Goup.pdf
  8. Which 403(B) Is Best?

    I agree with Krow and Ed You must get away from that horrid 403b plan you are in first and foremost.That outfit seems built to help the sales team more than the investor. Do things in small steps. Since you don't seem to be investing all that much( but good for you that you are saving as much as you can) , I would focus on a Roth or better yet in your circumstances a traditional IRA with very low cost Vanguard or Fidelity index funds. Please make sure you allocate wisely as too much of a stock orientation could cost you in a downturn. A mix of bonds and stocks would be smart. Perhaps a 70 % Stock-30% Bond allocation would be wise or maybe better yet a Target Fund matched to your retirement age. When you get to the point that you can save more that the IRA limit, then would be the time to investigate your state 457b plan which seems decent and available. Also don't forget, your wife can also contribute to an IRA. Of course we still are interested in seeing your provider list.
  9. That sort of makes sense and a most logical outcome if it does pass but losing the tax deduction will hurt how much a family will be able to put away even further since it won't lower your tax rate. With further tinkering of Social Security which I think will happen sooner or later, its not a good scenario. Look what young teachers are paying into their state sponsored retirement plans now. Much more than I did. Actually I payed zero into it!! Not the case in Virginia anymore. All of this can't be good for families already strapped trying to make ends meet with rising health care costs, daycare, and everything else they have to take care of. We are on the verge of forcing the retirement savings rate even lower. Put on top of that that teachers will continue to be ripped off with high fee annuity plans. I don't see that trend abating considering how many active salespeople and companies seem to be out there in droves selling these awful products. Plus the current political thought is let the free market do its thing and not interfere even if its screwing people. I better stop this post. I am getting disgusted.
  10. I don't think it will pass. Of course some folks won't care because they don't save anywhere near the limit. But if they are going to reduce the limits, 2,400 is a ridiculously low amount. Seems radical.
  11. Our Recent Experience With Axa

    My impression was that he was weary of having to deal with the situation at all. .
  12. Which 403(B) Is Best?

    Good investigative work by Krow.
  13. Which 403(B) Is Best?

    Correct. Lets wait until you get that list and then we can stake out a plan for you and discuss your other questions. Also might you know if you have access to a 457b plan? You can't just pick any company you want in a 403b-457b. It must be on your approved company list. A roth or regular IRA is a different story you can invest with anyone you want up to the limit allowed.
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