Important to note that the "super" catch contributions for workers age 60 to 63 has to be adopted by your employer. If it's not currently available by your employer, interested employees should lobby their HR department to get the feature added. With regards to this feature likely not being something that most workers have the ability to take advantage of, one of the dirty little secrets of 401(k) plans is that they tend to be most advantageous to mostly highly compensated employees, who have the ability to take advantage of the highest savings limits. In most corporate 401(k) plans, 80% of plan assets are held by approximately 20% of company employees, usually the most highly compensated employees of the company.
I agree with your comment that SSA reform is relatively simple and can be done so with minimal impact to current beneficiaries. As a former pension and retirement plan advisor who had the benefit of hanging around a bunch of actuaries who were way smarter than me, there are basically only three levers needed to create real SSA reform and extend the life of the program for a very long time. First, extend the retirement age. Everyone knows life expectancy has increased since the program began almost 100 years ago, so rather than an FRA of 67, extend FRA to something closer to 70. Second, increase or uncap the annual OASDI wage limit, currently at $176,100. Congress already did this with Medicare, why not do the same with OASDI? These first 2 changes would significantly strengthen the program. If needed, a third lever would be to raise the OASDI tax rate currently at 6.20%, either through the current flat rate structure or through a revised income-based rate similar to the current Medicare tax model. The problem is that our political leaders on both sides of the aisle lack the courage to discuss simple reform steps, choosing to focus on political pitches that play to both bases that they "won't touch social security." There HAS to be some sort of change using these 3 levers sometime between now and the early 2030's. Might as well be honest with the general public and do it sooner rather than later.
It's funny that you should mention Cuban's sale of Broadcast.com, because in today's 24-hour instant news cycle, 1999 is ancient history. Two things always stood out to me about Cuban's sale of Broadcast.com. First, the deal closed in January or February of 2000. Cuban's timing of the sale couldn't have come at a more opportune time, with the Nasdaq as well as the broader stock market topping out less than a month later, in early March 2000, the beginning of a brutal 3-year Bear Market. But even more memorable and remarkable was how Cuban handled the sale of the company. Rather than reaping the rewards of his Billion Dollar windfall solely for himself, Mark Cuban made sure that EVERY one of the 1,800 employees of the company, right down to the janitor, was made at least a millionaire as part of the deal. Now that's true LEADERSHIP. A rising tide lifts all boats. Mark Cuban lifted up every one of the Broadcast.com employees that helped make that company a success. Since learning the details of that transaction, I've continued to admire not only Mark Cuban's business acumen, but also his thoughtful leadership.
There's a concept in the accounting and finance world known as a sunk cost. This is a classic example of a sunk cost decision. The prior cost of the 40 gallon tank is irrelevant to the 50 gallon tank decision. Sorry Jon, let's move forward with that larger tank. And Jon, if you're not a fan, I'd also recommend listening to some of The Replacements music as well. A great alt rock band from the 1980's.
Comments
Important to note that the "super" catch contributions for workers age 60 to 63 has to be adopted by your employer. If it's not currently available by your employer, interested employees should lobby their HR department to get the feature added. With regards to this feature likely not being something that most workers have the ability to take advantage of, one of the dirty little secrets of 401(k) plans is that they tend to be most advantageous to mostly highly compensated employees, who have the ability to take advantage of the highest savings limits. In most corporate 401(k) plans, 80% of plan assets are held by approximately 20% of company employees, usually the most highly compensated employees of the company.
Post: 401(k) Savings Limits
Link to comment from March 27, 2025
I agree with your comment that SSA reform is relatively simple and can be done so with minimal impact to current beneficiaries. As a former pension and retirement plan advisor who had the benefit of hanging around a bunch of actuaries who were way smarter than me, there are basically only three levers needed to create real SSA reform and extend the life of the program for a very long time. First, extend the retirement age. Everyone knows life expectancy has increased since the program began almost 100 years ago, so rather than an FRA of 67, extend FRA to something closer to 70. Second, increase or uncap the annual OASDI wage limit, currently at $176,100. Congress already did this with Medicare, why not do the same with OASDI? These first 2 changes would significantly strengthen the program. If needed, a third lever would be to raise the OASDI tax rate currently at 6.20%, either through the current flat rate structure or through a revised income-based rate similar to the current Medicare tax model. The problem is that our political leaders on both sides of the aisle lack the courage to discuss simple reform steps, choosing to focus on political pitches that play to both bases that they "won't touch social security." There HAS to be some sort of change using these 3 levers sometime between now and the early 2030's. Might as well be honest with the general public and do it sooner rather than later.
Post: Worried? Concerned? Confident? About the future of Social Security and Medicare
Link to comment from March 24, 2025
It's funny that you should mention Cuban's sale of Broadcast.com, because in today's 24-hour instant news cycle, 1999 is ancient history. Two things always stood out to me about Cuban's sale of Broadcast.com. First, the deal closed in January or February of 2000. Cuban's timing of the sale couldn't have come at a more opportune time, with the Nasdaq as well as the broader stock market topping out less than a month later, in early March 2000, the beginning of a brutal 3-year Bear Market. But even more memorable and remarkable was how Cuban handled the sale of the company. Rather than reaping the rewards of his Billion Dollar windfall solely for himself, Mark Cuban made sure that EVERY one of the 1,800 employees of the company, right down to the janitor, was made at least a millionaire as part of the deal. Now that's true LEADERSHIP. A rising tide lifts all boats. Mark Cuban lifted up every one of the Broadcast.com employees that helped make that company a success. Since learning the details of that transaction, I've continued to admire not only Mark Cuban's business acumen, but also his thoughtful leadership.
Post: Better Angels
Link to comment from March 12, 2025
There's a concept in the accounting and finance world known as a sunk cost. This is a classic example of a sunk cost decision. The prior cost of the 40 gallon tank is irrelevant to the 50 gallon tank decision. Sorry Jon, let's move forward with that larger tank. And Jon, if you're not a fan, I'd also recommend listening to some of The Replacements music as well. A great alt rock band from the 1980's.
Post: Replacing the Replacement
Link to comment from March 6, 2025