Fribble Wednesday, January 19, 2000


By TheBadger

Saving for retirement used to be easy. Well actually, saving structures for retirement used to easy to figure out; the actual saving part has always been and always will be the difficult part. Nonetheless, there was a time (in pre-Fooldom) when understanding "tax deferred" saving structures was relatively easy; we had pensions, 401(k) plans (a late '70s invention) and the new kid on the block was the IRA.

Now in the new millennium (when everything is still working except your VCR -- just set it to 1972 and everything will be fine), it occurs to me that Senators Keogh, Roth, and others have actually done us a disservice. Today we have 10 different types of IRAs. Pensions are still around, money purchase plans, social security integrated profit sharing plans, the old Keogh still lives, plus SEPs, SIMPLEs, and no one except an enrolled actuary understands cash balance plans. And this is just the private sector. Public sector employees have a whole new set of plans with equally arcane rules.

All of a sudden, this is all very confusing; and let's not even touch the subject of how to get money out of your favorite plan, particularly if you are not 59 1/2, disabled, or dead. To make matters worse, some plans work for employees and others only work for the self-employed and still others operate for company owners with a different set of rules. Next, a congressional favorite of the '80s was indexing for inflation. As a result, 401(k)s and portions of other plan types were indexed (but the formula is a national security secret stored next to the nuclear codes) but IRAs were not. Why not? Did someone forget?

Actually, I am not sure if this is a Fribble or a Rant (credit to Dennis Miller). Either way, Congress, wake up! You have created a stew that tastes pretty bad and no one is sure of the ingredients anymore. It is clearly time for "tax deferred" plan reform.

As a result, I support the creation of the FOOLEDEPLATARPAC (phonetically that is: fooled-deplat-tarpac) and stands for the Foolish Deferred Plan Tax Reform Political Action Committee. Inaugural membership is only $10 if you join by April 15, 2000 (watch for this new contribution check box on your 1999 federal 1040 form).