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.

  • @Cryophilia
    link
    08 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.