Back in February I wrote about the good old days when employers would lay off non-essential or excess workers in order to remain viable.1 Another trend I see is that employers are off-loading benefits onto their employees.
For example, fifty years ago workers could retire on the company’s pension after working there for 20 or 30 years. Now, workers are expected to set aside some earnings for retirement in a 401(k)2 or 403(b)3. The employer might contribute a matching benefit in which they contribute 4% of what each employer contributes.
What’s next? Health insurance. Employees now can contribute to a Health Savings Account (HSA)4 with pre-tax dollars. Plus, earnings (if any) also are tax free. Even withdrawals for qualified expenses is free of taxes. And if you live to be 65 years old, you can withdraw funds for any reason without penalty. Here’s the thing – the HSA is available only when choosing a (cheap) high deductible health plan (HDHP)5. Hence, it seems a most appropriate replacement for a retirement savings for young, healthy professionals.
What’s left? Perhaps we’ll see Tuition Saving Accounts. Although by then perhaps most of the workforce will be replaced by robots and AI.
- https://ludditegeek.blogspot.com/2025/02/longing-for-layoffs.html
- https://www.irs.gov/retirement-plans/401k-plans
- https://www.irs.gov/retirement-plans/irc-403b-tax-sheltered-annuity-plans
- https://www.fidelity.com/learning-center/smart-money/are-hsa-contributions-tax-deductible
- https://www.fidelity.com/learning-center/smart-money/what-is-a-high-deductible-health-plan
