After reading several of my favorite sites out there, I’m beginning to wonder whether there is a shadow government running America. The “Cash for Clunkers” program will cost the US tax payer $3 billion to graciously put 700,000 people who drive beaters into cars costing 5-6X more. Yay, there’s a one time boost to August US auto sales due to hundreds of thousands of people who can’t afford new cars (according to the 1/10th rule)!
Over at DINKS Finance, I’m reminded that the income limit for Roth IRA contribution for single people is $105,000. So they’re telling us after saving a party-throwing $6,000 bucks, the moment you make over $105,000 you can no longer contribute? Too bad for you 29 year old grad students out of business school with a median income of $105,000. Oh yeah, and all you doctors who spent 8+ years of your life AFTER college and those bagillion hours studying, so sorry! The government isn’t willing to help you save for retirement. No soup for you!
Meanwhile, over at WSJ’s The Wallet, there’s mention that the government may lower the maximum contribution limit on 401(k) retirement accounts from $16,500 to $16,000 due to low inflation! After 30 years of saving $16,000 a year, you’ll either have more or less than $480,000, depending how adept you are at blowing yourself up in the stock market. August 31′s entry, “Get Rich in September & Buy Nothing” may very well be spot on after Tuesday’s romp. Are we supposed to be able to retire on $500,000-$1,000,000 from our 401k given Social Security is going to zero? Not if the potential wave of inflation has something to do with it given all the monetary expansion.
Come on US Government. Promote savings and stop ruining people’s personal finances by making us buy things we can’t afford. The “Cash for Furniture”, and “Cash for Vacations” programs being debated around Congress aren’t a good idea!
Raise the IRA income limit to $250,000, consistent with the borderline of what Obama deems “rich.” Why should doctors, lawyers, graduate students in finance be punished for furthering their education in fields where they make more money? Many of them have massive debt to repay and aren’t exactly “rich” for the first several years.
Please also raise the 401K pre-tax contribution limit to at least $30,000 if not $50,000/yr. It’s not like everybody will be able to save that much, but if a 45 year old faces the same $16,000 limit as a 22 year old right out of school, how does that make sense? $16,000/yr in pre-tax savings is just not going to cut it for many people when they are retired.
At the end of the day, please STOP spending more than you earn. It’s embarrassing. Remember the old adage, “Do as I say, not as I do!“ No that’s wrong. I meant to write, “Do as I do!” You can do it USA government! Set a greater example for us and our children. Go America!
Slicing Through Money’s Mysteries