> And tying an individual's future (health insurance, retirement, immigration status) to an employer is a bad thing.
Retirement isn't really 'tied to an employer', in that you can still open an IRA without an employer[0], or use a non-tax-advantaged account for retirement savings (most people outside the military or government service use non-tax-advantaged accounts for at least a portion of their retirement, since the IRA and 401(k) contribution limits are too low for most people to survive on during retirement).
This might have been different 50 years ago, where employer-driven pensions were more common, but today, the only real way your employer impacts your retirement is the 401(k).
The purpose of both the IRA and the 401(k) is to provide people with an extra incentive to plan for retirement. Putting away $450/month towards your retirement[1] can be unpleasant, but if you're getting, say, $90 that back (in the form of lower tax withholdings/taxes due), it makes it a bit easier, because that's effectively only $360 out-of-pocket.
The incentives work similarly for the 401(k), except the tax savings work out for the employer as well, meaning that they are incentivized to give you some portion of your compensation in the form of 401(k) matching (ie, they have an extra incentive to nudge you towards saving more of your own money for retirement).
Personally, I do believe that, if you do not have access to a 401(k) through an employer, your IRA contribution limit should be raised by $17,000 (which is the 401(k) contribution limit for individual contributions). But without employer contributions, at most that's saving you less than $6,000 - and that's if you're already at the very top marginal tax brackets (even making $100K gross in NYC, the most heavily taxed jurisdiction in the country, won't be taxed at 35%).
[0] Well, you can't contribute more than your total annual income to an IRA, but if you're making less than $450/month and living in the US, retirement planning is not your most immediate problem.
[1] ie, enough to max out your IRA contribution limit
Retirement isn't really 'tied to an employer', in that you can still open an IRA without an employer[0], or use a non-tax-advantaged account for retirement savings (most people outside the military or government service use non-tax-advantaged accounts for at least a portion of their retirement, since the IRA and 401(k) contribution limits are too low for most people to survive on during retirement).
This might have been different 50 years ago, where employer-driven pensions were more common, but today, the only real way your employer impacts your retirement is the 401(k).
The purpose of both the IRA and the 401(k) is to provide people with an extra incentive to plan for retirement. Putting away $450/month towards your retirement[1] can be unpleasant, but if you're getting, say, $90 that back (in the form of lower tax withholdings/taxes due), it makes it a bit easier, because that's effectively only $360 out-of-pocket.
The incentives work similarly for the 401(k), except the tax savings work out for the employer as well, meaning that they are incentivized to give you some portion of your compensation in the form of 401(k) matching (ie, they have an extra incentive to nudge you towards saving more of your own money for retirement).
Personally, I do believe that, if you do not have access to a 401(k) through an employer, your IRA contribution limit should be raised by $17,000 (which is the 401(k) contribution limit for individual contributions). But without employer contributions, at most that's saving you less than $6,000 - and that's if you're already at the very top marginal tax brackets (even making $100K gross in NYC, the most heavily taxed jurisdiction in the country, won't be taxed at 35%).
[0] Well, you can't contribute more than your total annual income to an IRA, but if you're making less than $450/month and living in the US, retirement planning is not your most immediate problem.
[1] ie, enough to max out your IRA contribution limit