A Really Bad IdeaPosted: October 22, 2017
The other day I got a text from Carter, “Do we have any debt?” She was in a lecture in Germany where the speaker was talking about America’s debt problem. I was able to ease her mind and remind her of some basic rules I have tried to teach her. Save money and buy big things with cash, don’t charge more on your credit card than you have in the bank and pay it off it full each month, and start saving for retirement as soon as you start earning money.
Learning the lessons of good money management must start young. Not using shopping as a form of therapy or entertainment help set kids up for a potentially debt free future. Not coveting things is and delaying making purchases to decide how badly you really want something must be practiced.
All this debt and money management talk with Carter happened just before the president’s tax reform talks really got going. There is one proposal in the tax reform which I find so contrary to what this country needs and that is the change from a young person being able to contribute up to $18,000 in a 401k plan tax free to just $2,400. If ever there was a bad idea it was this one.
Americans need all the incentives possible to save for retirement. We, as a nation, are already bad at dealing with our debt. So many people think if someone is willing to loan them money they should take it. We have no guarantee that social security is going to be ble to continue use to fund itself at the same rate it has. Each American should be be encouraged to be able to fund their own retirement as the current system does.
I know this president has had no wins as far as campaign promises outside of executive orders, but to change the 401k incentive just so you can appear to be giving a tax cut is the worst thing for the future of this country. This one is worth fighting over no matter which party you are in.