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.

  • Cosmonauticus@lemmy.world
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    8 months ago

    Well if you stopped buying frivolous items like GROCERIES you’d have plenty to invest. Then you could enjoy your retirement for a comfortable 3 years before going back to work

    • Flying Squid@lemmy.world
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      8 months ago

      We were talking to my daughter about this just yesterday. It’s not even groceries. People think that if you spend $30 or $40 a month on things that make you and those you love happy, you’ll never save enough to make yourself marginally more comfortable in the last 10-20 years of your life (if you’re lucky) that will be uncomfortable no matter what.

      So I suppose maybe if I denied myself and my child every pleasure in life, sure, I could put money in a 401(k). That is not something I would do and I certainly do not think it’s a good lesson to teach a child. I’m sure someone will call that some sort of “live for today” or YOLO attitude rather than not giving your child the most miserable childhood you can.

      • ampersandrew@lemmy.world
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        8 months ago

        So I suppose maybe if I denied myself and my child every pleasure in life, sure, I could put money in a 401(k).

        But that’s unproductive hyperbole. Not every pleasure in life costs money, and lots of things you spend money on can be optimized. And even after doing that, if you still feel too squeezed, it might be worth considering a career change and a plan for how to get there.

        • Flying Squid@lemmy.world
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          8 months ago

          It might be unproductive hyperbole, but I’ve been told that exact same thing more than once right here on Lemmy.

          • QuarterSwede@lemmy.world
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            8 months ago

            Sounds like you have an axe to grind. Sorry life has been hard for you friend. Hope it gets better. Hang in there.

      • protist@mander.xyz
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        8 months ago

        You were telling your daughter that you’re spending $30/mo on her to make her happy instead of saving it for your old age? I don’t know how you communicated that, but on the surface that does not sound like a healthy thing to tell a child.

        If you’re worried about providing your daughter a fulfilling childhood, maybe also consider prioritizing time with her? You spend a lot of time on Lemmy dude, is that time you could be spending with her? Or are you on your phone a lot when you’re with her?

        • Flying Squid@lemmy.world
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          8 months ago

          Do you think that maybe you don’t pay attention to what actual times of day I’m on Lemmy vs. when I’m not on Lemmy and think that maybe I spend those times with my family?

          I’m here a lot because I’m currently very sick (I recently got back from the Mayo Clinic). I suppose that’s my fault?

          • protist@mander.xyz
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            8 months ago

            No, I’ve never paid attention to when you’re online, I just see you average 100 comments and posts per day. I still think telling your daughter that you’re spending $30/month on her instead of saving for retirement is not healthy.

            • Flying Squid@lemmy.world
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              8 months ago

              I know a lot of people taking care of their elderly parents. I have yet to meet one who says they regretted their parents buying them toys. Do you know any?

              Also, as I already said, I am on Lemmy a lot because I am very sick and have nothing else to do most of the time.

              • protist@mander.xyz
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                8 months ago

                You’re misunderstanding my point. I’m saying it’s not healthy to tell your young child explicitly that you’re making this choice between buying them a toy or saving for retirement. This conversation started with you saying you just had that conversation with your daughter yesterday.

                • Flying Squid@lemmy.world
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                  8 months ago

                  Do you think the conversation was literally “I’m making a choice between buying you this toy and saving for retirement?” For one thing, she’s almost 14.

                  • ripcord@lemmy.world
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                    8 months ago

                    The only person I’ve seen attempting to make that argument in this thread is you. It’s been a really weird strawman thing.

              • Cryophilia@lemmy.world
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                8 months ago

                I know a lot of people taking care of their elderly parents. I have yet to meet one who says they regretted their parents buying them toys. Do you know any?

                Raises hand

                Hello, I’m now paying out the ass for my parents not to starve in their old age. We were poor as shit growing up, but I know my parents never had a written budget and they could have made better financial choices. I’d still be supporting them but it wouldn’t be as painful.

                Every dollar spent on Christmas gifts that we forgot about a month later could have been a dollar invested in their retirement. I wish we’d decided as a family to not partake in gift exchanges and instead spend more time with each other. I wish my siblings and I had been encouraged to start working as teenagers to contribute to the family budget.

                Most of all, I wish we’d had a clear financial plan as a family. I didn’t figure out finances until my early 20s. The value of saving is something that should be taught at a young age.

      • person420@lemmynsfw.com
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        8 months ago

        I promise you, if you put that $30/month into your own IRA, you’ll make her a lot happier when she doesn’t have to support you when she’s grown up.

        The problem isn’t spending a little to make you or your family happy, it’s spending for consumable things today, that’s going to put you at a huge disadvantage later.

        I get it, I have two kids, it’s fucking expensive. But you know what’s even more expensive? Taking care of old people.

        • Flying Squid@lemmy.world
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          8 months ago

          “I know you want that doll, honey, but I’ve put the money for it into an IRA and it will make you a lot happier when you don’t have to support me when you’re grown up.” You do you with your kids, I’m going to get mine things that will make her happy.

          And she already knows she has no obligation to support me. I’ve made that clear to her.

          • person420@lemmynsfw.com
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            8 months ago

            Do you really think she’s just going to let you starve and live on the street?

            And yes, that’s exactly what you say. Funny how it’s not things that make kids happy, it’s spending time with them. Reading to my daughter her favorite book for the 1000th time is much more enjoyable than just buying her a new doll.

            It’s also a great lesson in short term happiness vs long term happiness.

            • Flying Squid@lemmy.world
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              8 months ago

              You bought her a book? When you could have put that money in a Roth IRA?

              You’re clearly an abusive parent!

              • KevonLooney@lemm.ee
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                8 months ago

                Stop being obtuse. You know what he means.

                Also, libraries are great for kids to choose their own books. You just assumed he spent money on a book instead of time taking his kid to the library. It’s true, kids don’t care about money. They care about time you spend with them.

                • Flying Squid@lemmy.world
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                  8 months ago

                  True, I did assume that someone who claims to have read the same book to their child 1000 times did not get it from the library.

              • ripcord@lemmy.world
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                8 months ago

                You’re saying you only have enough extra money each month for either a children’s book, OR that book’s value in retirement savings?

                And assuming that’s their life situation as well?

      • Cryophilia@lemmy.world
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        8 months ago

        So I suppose maybe if I denied myself and my child every pleasure in life, sure, I could put money in a 401(k). That is not something I would do and I certainly do not think it’s a good lesson to teach a child.

        I think that’s an excellent lesson to teach a child.

        Poverty sucks. Try to get out of it. Deny consumerism, save your money.