[quote=AN][quote=flu][quote=AN][quote=carlsbadworker]Because they have no idea how much wealth they needed and how to generate sustained cashflow, so they tend to over-save (maximize 401K in both spouses’ accounts) and do nothing when inflation kicks in.[/quote]
How do you “over-save”?[/quote]
Simple, excessively contribute to a 401k, so that in your golden years you are taxed hire post retirement than during your earning years…After all, you’re forced to take mandatory distributions at a certain age. If it goes below a limit, you pay penalties, if you take distributions above a limit, you pay penalties too…[/quote]
You’re assuming the saving is in 401k. What about Roth IRA, Roth 401k, cash, houses, investments in small biz, investment in small biz that grew to mid size biz, etc.?[/quote]
Roth hasn’t been around long enough for most of the baby boomers and pre-baby boomers to have meaningfully been useful. Exceptions are baby boomers that took were slightly more proactive and rolled over 401k/IRA’s into Roth a few years before the mandatory distributions. As far as house, retiring folks in CA can do transfers between counties to keep their prop tax rates so I agree with you there. I was only talking about 401k/IRA overcontributions, which is entirely possible. My relatives called it the 401k government scam.. Help the government save to pay more taxes post retirement.
