Tuesday, October 9, 2007

Clinton's 401k for Every Family Plan

I recently read an article on Yahoo! titled Clinton Proposes 401(k)s, Matching Funds. I have to admit I am a fan of this idea. I believe that the majority of Americans are not going to be ready for retirement and thus have to continue to work well past normal retirement age. This plan calls for a 401k for every individual in which you can save up to $5,000 a year and the government will match your first $1,000. I like this idea and if I was eligible then I would definately participate, at least up to the match. The program would be paid for by taxing those with estates of over $7 million per couple. In order to get the $1,000 match you must earn less then $60,00 a year which is me. I'm not sure if she wants people who already participate in 401k's at work and recieve a match to be eligible.

The one thing that puzzles me with her proposal is the sentence in the article that states that for 1 estate over $7 million being taxed they can match at least 5,000 families. The math doesn't quite work out in my head and maybe I don't quite understand. If each family has only one 401k and get a $1,000 match, then that is $5 million for 5,000 families. Most families have more then 1 individual. I don't think you can tax someone with $7 million a total of $5 million. That's a hefty tax. So although I don't see how it would work as laid out in this article, I do believe this could be a good idea if figured out and proposed correctly. I know I certainly would like the extra $1,000 a year for retirement!

No comments: