We’ve been seeing this idea floating around a lot lately. Whether the purported reason is to “force people to save” or (more likely) to give the government access to all that money locked up in 401Ks and IRAs, the result is the same. Increasing taxes (and if it’s forced by law, it’s a tax no matter what they call it) on people fund retirement is a huge mistake.
Retirement is a relatively recent fad. Until after WWII, no one retired. You worked until you couldn’t any more and then you lived with your children until you died shortly thereafter.
Nanny state policy wonks who think they know better lament that people aren’t saving enough for retirement but I think it’s the people who know better. They know that retirement is over. Social Security is unsustainable and saving money, putting off current consumption, for the promise of a retirement that is unlikely anyway doesn’t make much sense.
Why save for a retirement that will never happen?
Better to enjoy it now while you can.