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re: Today's lesson: Inflation
Posted on 3/20/24 at 12:36 pm to zadams_318
Posted on 3/20/24 at 12:36 pm to zadams_318
quote:
Teach them how to invest next. The importance of your 401K, CD accounts, and all the other investment accounts that make you more money than a regular savings account. Teach them how to maximize their money to keep up with the inflation
Does it though? There really isn't any tax advantage to retirement savings...the data and most tax professionals agree (money managers, whose livelihood depends on management fees disagree). Progressive taxation means most people pay about 14% on all income and most of that is in the middle...the same place they will pay taxes in retirement. The whole "matching contribution" is also a scam...because it allows employers to pay less salary while convincing employees they are getting something for nothing...again, the data is out there...wages have been stagnant since the idea of retirement savings washed over middle class America like a tsunami of financial disaster. The money you save is not going to be enough to retire on unless you cut back on lifestyle because of inflation. Most people have managed to keep most of what they have saved...and that's it, they haven't actually made much if any after management fees etc....and again, the data backs that up. The money managers have made a pile, but the "investors" basically have what they have saved plus what their employers took out of their salary contract and "contributed". The average return on retirement savings is less than 5%...at best it is 6-8%. Inflation averages about 2.5%, add a meager 1% management fee, low for most people, and you are looking at an actual return of less than 1.5% without weighing risk....weigh the risk and a passbook savings account looks very similar AND you have already paid the taxes and can do with that money anything you damn well please anytime you damn well please without any penalties. When Americans were conned into thinking we were all going to be wealthy because rich folks decided that defined pension benefit plans weren't in their best interest we, like all marks of con men, fell for it through greed...
Posted on 3/20/24 at 12:45 pm to AwgustaDawg
quote:
The whole "matching contribution" is also a scam.
Ok
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