10 Reforms That Would Improve Our Retirement System

It is a strange twist of history that the primary way most Americans now save for retirement is through the 401K system, which in its beginning, was never supposed to provide a large percentage of retirement income.

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If we could just make the retirement system similar to the 529 system, we’d have a much better retirement system.

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That improved system would provide an economic boost to the entire country. Here I offer 10 suggestions that would dramatically reform the system.

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10 Reforms That Would Improve Our Retirement System

One of the biggest difficulties in understanding the retirement system is that there are too many different types of accounts. There are 401Ks, 403Bs, two types of 457s, and many others.

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How about we have just two accounts –The Tax-Deferred Retirement Account (TDRA) and the Tax-Free Retirement Account (TFRA) and you can split your contributions between them in any way you see fit no matter what your income?

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Part of the difficulty is that there are all kinds of income and contribution limits for each type of account. Even financial advisers can’t keep track of them all. Why not standardize them?

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If employers wish to use retirement benefits to retain employees, they can offer a match of however much they like, up to 30% of the gross income of the employee.

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The 529 system demonstrated that the free market can provide low-priced and high quality investing options.

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States compete with private employers such as Vanguard and USAA to provide the best plans. The retirement system could work exactly the same way.

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10 Reforms That Would Improve Our Retirement System

It is a strange twist of history that the primary way most Americans now save for retirement is through the 401K system, which in its beginning, was never supposed to provide a large percentage of retirement income.

If we could just make the retirement system similar to the 529 system, we’d have a much better retirement system.

That improved system would provide an economic boost to the entire country. Here I offer 10 suggestions that would dramatically reform the system.

10 Reforms That Would Improve Our Retirement System

One of the biggest difficulties in understanding the retirement system is that there are too many different types of accounts. There are 401Ks, 403Bs, two types of 457s, and many others.

1) Get Rid Of The Numbers

How about we have just two accounts –The Tax-Deferred Retirement Account (TDRA) and the Tax-Free Retirement Account (TFRA) and you can split your contributions between them in any way you see fit no matter what your income?

Part of the difficulty is that there are all kinds of income and contribution limits for each type of account. Even financial advisers can’t keep track of them all. Why not standardize them?

2) Standardize the Contribution Limits

If employers wish to use retirement benefits to retain employees, they can offer a match of however much they like, up to 30% of the gross income of the employee.

3) A Sensible Employer Match System

The 529 system demonstrated that the free market can provide low-priced and high quality investing options.

4) Market-Based System

States compete with private employers such as Vanguard and USAA to provide the best plans. The retirement system could work exactly the same way.

SWIPE UP NOW TO READ MORE

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