At the very least, IRA annual maximums should equal 401K annual maximums.
Point. $18k is a lot more than $5.5k. If anything, it should be a big 'blob'. IE $20k or so between 'everything'.
The problem I see with SS and the other retirement plans is that most people lack the personal responsibility to save for their own future. If everyone actually gave a damn and concerned themselves about their own retirement plans, then we could get rid of SS, Medicare, Medicaid, Obamacare, etc.
Indeed. I don't think that many people like the government controlling their retirement fund, so much as many are too much of the grasshopper thinking paradigm that they don't even consider it until they're too close for personal savings to matter.
As having people too old to work being homeless or eating dog food is too negative of an issue to allow, as it looks bad on us as a nation, we needed a solution to that. Enter Social Security.
Since so many people seem to like the goverment controlling their retirement fund, maybe the US should require mandatory retirement funds for everyone. Like the SS scheme, the individual gets taxed via payroll deduction, but the money goes into an individual account instead of a general slush fund. Think of it as a mandatory 401k. The individual gets to decide how the money is invested, if at all.
I've proposed modifying minimum wage so that $1-2 an hour goes into somebody's HSP. That would allow most to have the necessary funds build up while they're healthy youths.
Still, for retirement we need to identify the core. I'd say that it's because we don't want pictures and exposes out there about homeless old people who just can't work anymore, as well as retired grandmas reduced to eating cat food.
As such, I wouldn't be wanting individual accounts and such - that gets expensive. I'd look more at making it a defined benefits package for SS - a sort of annuity. An inflation adjusted $12k/year or so isn't much, but it's generally sufficient to keep granny from sharing her diet with the cats. If they want more, they can save it themselves.
This also handles the issue of what happens when somebody lives much longer than expected - You could have the payments grow a little above inflation for those that live longer than the median life expectancy for their cohort. $24k/year for somebody who reaches 100 isn't a bad tradeoff when their money handling at 65 figured that there was a 90% chance they wouldn't live to 90.
At that point, if funds are not being combined/robbed, it can be voluntary and opt-out, with a amount default witholdingcontrolled by W-4 just like income tax withholding. It would be job-portable. Heck, you could have a little algorithm based on your age, dependents, etc to help you choose recommended withholding amounts.
You make it opt-out, and the grasshoppers will opt-out, then still demand money from the ants when winter comes. I think that a certain minimal amount needs to be mandatory.
Then you stick the excess into investments and build a national permanent fund to pay for this sort of stuff.
