Re:Peter Thiel turned a Roth IRA into a $5B tax-free piggy bank
by lotsofpulp on Thursday June 24, 2021 @06:06PM
(#27624463)
>It's clear that the IRA system was created to encourage saving for retirement through tax deferral.
It is not clear to me that IRAs were created for this reason. As far as I can tell, they seem to exist only to provide plausible deniability (and poorly at that) for 401ks giving an advantage to big businesses that can afford to implement them (pre Vanguard/cheap passive investing days) over smaller businesses that could not afford to implement 401ks.
Otherwise, I see no reason why people who work for employers that can afford to offer 401ks should have a leg up in tax advantaged retirement savings over people who do not and have to rely on IRAs (which have drastically lower contribution limits).
>It was not intended for billionaires,
It would have been simple to write in a limit for maximum amount of tax free gains in Roths.
It is not clear to me that IRAs were created for this reason. As far as I can tell, they seem to exist only to provide plausible deniability (and poorly at that) for 401ks giving an advantage to big businesses that can afford to implement them (pre Vanguard/cheap passive investing days) over smaller businesses that could not afford to implement 401ks.
Otherwise, I see no reason why people who work for employers that can afford to offer 401ks should have a leg up in tax advantaged retirement savings over people who do not and have to rely on IRAs (which have drastically lower contribution limits).
>It was not intended for billionaires,
It would have been simple to write in a limit for maximum amount of tax free gains in Roths.