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Also, along the same lines, why is it use or lose for contributions to a Flexible Spending Account at work? If a person doesn't use all the money they set aside towards the plan, why do they have to lose it? Where does the money go? (I've heard it "finances the plan", whatever that means.) If so, if everyone uses their money, then who "finances the plan"?
You can always save money by buying CDs at your local bank or credit union. They won't pay you as much, but they will be there when you need them.
I think OP was referring to the limitations on tax-deferred savings vehicles, not the wisdom of different asset classes for anyone's personal situation.
$16,500 a year for 45 years gives you $742,500 in your account...not too many studies I see show you can retire off that. When you withdraw, the govt takes 20% or so leaving you 600k. I would like to be able to save 25% of my income.
...came from the big panel / study of what tax rates would be needed to "save social security" back in the days of Greenspan's efforts to get the Whitehouse and Congress to do something about deficits. The same effort resulted in resulted in a rates for the tax treatment of deferred retirement savings plans that were supposed to encourage a broad range of workers to embrace them. It is hard to say if those rates are now really fair, my gut says that given the much lower returns that most people have experienced the amounts of dough that people are putting in should probably be increased...
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