Thrift Savings

Published on February 19, 2005 By stevendedalus In Politics

The Thrift Savings Plan, choices of several stock and bond funds available to all federal employees, is heralded as comparable to Bush’s privatization plan in which yields are greater than the returns on Social Security. Advocates omit that these contributions are after payroll tax. The Thrift Plan is nothing more than an ordinary tax shelter for those who can afford it. On the other hand, the Bush plan lends 4% of the payroll tax to those who opt for it and at retirement anything above the government’s cost belongs to the employee.

This approach does not address — worsens it in fact — the “bankruptcy” of social security in the distant future. Far better to raise the cap and begin incrementally increasing annually the payroll tax by 02% for ten years. As for personal savings, the government would do well to add incentives to small businesses to make available pensions to which their employees are free to contribute.

http://stevendedalus.joeuser.com

Comments

drmiler

on Feb 19, 2005

Advocates omit that these contributions are after payroll tax. The Thrift Plan is nothing more than an ordinary tax shelter for those who can afford it. On the other hand, the Bush plan lends 4% of the payroll tax to those who opt for it and at retirement anything above the government’s cost belongs to the employee.

Please show where you got this info from. Thank you.

dabe

on Feb 19, 2005

Man, I just wrote a long reply, and it got kicked because of a server error. Oh well.............

What I said was that I am a federal employee, and I pay into the Thrift Savings Plan (TSP). And, as correction, it is a pre-tax deduction, which is what makes it so beneficial. Frankly, I feel fortunate to have the opportunity to pay into both the TSP and OASDI, which is Old Age, Survivors, and Disability Insurance, the official name for SS. If I had only one, either one, it would not be enough for retirement, and I'd likely end up on welfare anyway. Having both may enable me to sock away enough before I retire to be able to have some modicum of comfort in old age. But, I sure as shit ain't gonna be rich.

zorven

on Feb 19, 2005

How is the Thrift Savings Plan any different than a 401(k) or IRA?

dabe

on Feb 19, 2005

How is the Thrift Savings Plan any different than a 401(k) or IRA?

I dunno. Maybe just that is administered for feds, by feds, so it has a different name. But, never having had a 401K or IRA, I don't know what those things are.

drmiler

on Feb 19, 2005

Man, I just wrote a long reply, and it got kicked because of a server error. Oh well.............

What I said was that I am a federal employee, and I pay into the Thrift Savings Plan (TSP). And, as correction, it is a pre-tax deduction, which is what makes it so beneficial. Frankly, I feel fortunate to have the opportunity to pay into both the TSP and OASDI, which is Old Age, Survivors, and Disability Insurance, the official name for SS. If I had only one, either one, it would not be enough for retirement, and I'd likely end up on welfare anyway. Having both may enable me to sock away enough before I retire to be able to have some modicum of comfort in old age. But, I sure as shit ain't gonna be rich.

I was actually asking more about the second half of the quote. But thank you for replying on the first half.

On the other hand, the Bush plan lends 4% of the payroll tax to those who opt for it and at retirement anything above the government’s cost belongs to the employee

Please show where you got this info.

stevendedalus

on Feb 20, 2005

And, as correction, it is a pre-tax deduction,

Exactly what I said, tax deferred but does not affect your payroll [ss&Medicare] tax.

stevendedalus

on Feb 20, 2005

Please show where you got this info.

Here we go again--Washington Post.

How is the Thrift Savings Plan any different than a 401(k) or IRA?

Precisely--it isn't any different.

drmiler

on Feb 20, 2005

Please show where you got this info.
Here we go again--Washington Post.

Thank you for the info. I would direct your attention to this page Link

and say try to find that info here.

stevendedalus

on Feb 25, 2005

I don't know why he retracted his statement because the fact remains that the full payroll tax is inviolate and for Bush to borrow commensurate with the payroll giveaway is nonsense if those who opt escape their obligation to pay for the loan.

drmiler

on Feb 25, 2005

Fact? I see no facts. What I see is supposition on your part with no documented proof that that's what he intents to do.

stevendedalus

on Mar 03, 2005

Then what's the point of borrowing trillions to get it rolling?--might just as well advocate Gore's social security Plus where the government matches or partially the employees' initiative to save more.

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