Creditor protection is a good point, and as for IRAs - Lots of people who read Hacker News can't contribute at all due to income limits.
My serious worry is that if the average American follows this advice they will lease a new car every 2 years and go to Hawaii every year - and when they are 65 will all want a retirement bailout from people who actually saved money. There's nothing preventing Congress from deciding to tax Roth in 20 years in this scenario.
You're not wrong. The retirement situation (excuse my french) is seriously fucked through a combination of events [1] [2] [3]. Pensions were great, because you couldn't ransack them as a participant. Social security is great because you can't cash it out. Most Americans can't or don't save enough for retirement (as humans, we suck at planning for the future, at least most of us), and a large proportion if the retired population lives on and is kept out of poverty by Social Security [4]. Pensions could have been sustainable with more realistic return assumptions, greater contributions from plan participants, and strong firewalls between the corporate sponsor and the plan. Instead, 401ks were sold to everyone and things turned out about how you'd expect.
With that said, I think making tax advantaged accounts more accessible to your average person is a net win, even if we have a lot of work left to do to encourage good long term financial planning and behavior. Some policy I've been modeling is if you take an early distribution from a retirement account, the penalty goes towards your social security benefit. You still want to discourage folks from touching retirement savings, but that also requires more robust social safety nets so there are fewer events when citizens are financially bleeding out in the snow and need to tap those accounts.
Most of this country will not be able to save enough for retirement. It might make sense here to just eliminate 401ks and IRAs and use the meet increase in that revenue to expand SSA to actually be a national pension program. But politics kinda prevents this.
I actually see this as a way forward, depending on how dire the situation gets. An alternative, yet more radical path, is the Federal Reserve buying up income producing securities and issuing citizen dividends from those securities directly to citizens using FedAccounts (essentially UBI).
UBI is an ideological conundrum for most of America. We all voted down free $1000/mo and Medicare For All when Yang and Bernie were eliminated in the Democratic Primary. That just shows how much we are driven out of spite and a one-sided mentality.
>Pensions were great, because you couldn't ransack them as a participant.
Yes, because they would already be ransacked by the board of trustees for the pension plan. Or future taxpayers would be ransacked by underfunding in the case of taxpayer funded pensions. The government tried to stop the ransacking with PPA 2006, and apparently a properly funded defined benefit pension plan is incredibly expensive (surprise), so of course companies would drop them.
There's no reason for me to give control of my savings to a third party, especially now that I can buy VOO or whatever index fund I want at almost no cost.
All long term financial planning is terrible on all accounts - look at people spending $200k to get an English degree at a private college. Fixing human nature is tough.
My serious worry is that if the average American follows this advice they will lease a new car every 2 years and go to Hawaii every year - and when they are 65 will all want a retirement bailout from people who actually saved money. There's nothing preventing Congress from deciding to tax Roth in 20 years in this scenario.