Pleae I hate to hear, "We did not have those means of saving."
My grandfather began saving before the depression and started again after the depression. My father began saving after the depression. I in turn began saving way before there were IRA, 401-k's and the like. Gee somebody give me a tax break so I can save.
Why do you think these plans were created? Need a hint? Look at what was happening to the FICA tax rate. Was it going down? I do not think so. What was happening to the Federal Income tax rates? Were they going down? I do not think so. So in essance my generation was paying both more in FICA and Federal income tax than earlier generations.
Congress in their infinite wisdom heard the crys of the lower income people and at the same time saw inminent bankruptcy of Social Security. Remember OASI was cash negative from 1970 through 1983. They new you could not rely on Social Security and needed to get the savings rate back up. Therefore, they enticed people to save by creating an IRA account. This was in the hopes of lessoning the burden of Social Security (more palatible to cut benefits in the future) while at the same time bringing the tax rates back in line with earlier generations.
When FICA taxes were again raised, they created the day care credit. When FICA taxes were again raised they created 401-K's
What should have happend and did not was instead of raising FICA taxes, they should have left them alone and cut benefits.
In summary, the simple fact that IRA's and 401K's were not around, was no reason not to save. The reason you did not save was you did not want to. That is the only reason why anyone does not save. You had different priorities.
If you are as old as I think you are, take a look at all your old tax returns and look at the tax rates. I have and your reasoing is all wet.
