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« When Will the Housing Bust Be Over? Not Soon | Main | Props to AAA Car Insurance -- They Took Care of Me »

September 13, 2007


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So where did the lost $30 billion go?

- They spent it buying stuff. Companies made more sales, more profit, employed more people. Stock market went up ...
- Companies didn't have to match it. Savings fell to the bottom line, employed more people. Stock market went up ...
- Uncle Sam received more taxes. The national debt didn't have to go up as much ...

Seems these Americans are our unsung heroes! What if they start fully utilizing their 401k's? Consumer spending down, corporate earnings down, tax revenue down ...

It gets worse! They not only gave up the match by turning down the best deal they'll ever be offered - if they have any savings, they also will pay a lifetime of extra taxes unnecessarily. A common misconception is that 401(k)'s are merely tax deferred - they are much better than that, actually tax exempt in that no tax is ever paid on the earnings on the after tax money. Only your original salary ever gets taxed, not the money you make later by investing your after tax salary. The way that the taxes on your salary are collected later on withdrawal is so confusing that almost everyone fails to grasp that to the penny, just like Roth IRA's, EARNINGS on the after-tax money in 401(k) plans are NEVER TAXED! Really!!!

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