Your 401(k) Might Retire Before You Do

This is a short snippet of Bloomberg Opinion Today, a favorable tax treatment of Bloomberg Opinion’s opinions, by Jessica Karl . To get the full version of this newsletter in your inbox daily, sign up here.

Today’s Must Reads

• Say goodbye to your 401(k).
• Chocolate prices run away.
• Ukraine’s forces start to decay.
• Capital One did a deal Monday.

RIP, 401(k)

Allison Schrager has some bad news for you: Your 401(k) will be gone in 10 years, and not because some dude at a bar is going to con you into draining your retirement savings. The funds you’ve tucked away will still be safe and sound, thankfully. But your retirement plan itself will cease to exist.

Much like Donald Trump — who is peddling gold sneakers and $99 perfume to help pay his legal tab — the government is scrambling for money. We’ve got entitlement programs that need funding and a national debt that’s collecting interest. Allison says it’s only a matter of time until your precious tax-advantaged retirement account gets put on the chopping block.

“There are good policy reasons to end it,” she argues. “Eliminating the favorable tax treatment of the 401(k) is much less painful politically than increasing taxes directly.” But it raises some questions: Without a 401(k), will Americans still save for retirement? And without retirees, what will happen to Florida’s black market for erectile dysfunction drugs?

The Sunshine State, for one, will almost certainly be fine thanks to the Jeff Bezos-led pilgrimage of ultrawealthy taxbirds. And plenty of Americans will still save for retirement, even without the special tax treatment. In the future, Allison says savers will use employer-sponsored liquid accounts: “Like a retirement account, it is funded by payroll deductions, but unlike a 401(k), it allows employees to withdraw money without a penalty when needed.” She points to Denmark and Canada as evidence that workers need not tether their fortunes to tax-advantaged retirement accounts to save up for their golden years.

Although the 2.7 million people who recently took advantage of the “great retirement” wave probably feel pretty smug right about now, there are still plenty of reasons for us to collect a nest egg — even if it ends up getting a little cracked. Read the whole thing (for free!).

Bonus Retirement Reading: If your pension-savings strategy involves bond funds, you may want to reconsider. — Stuart Trow

Telltale Chart

I knew credit cards were expensive — especially the platinum, fairy-dusted ones that can send you to space — but $35 billion?! No amount of free miles, intergalactic or otherwise, is gonna entice me to sign up for that. But Capital One didn’t just buy a single credit card with that multi billion-dollar sum — it bought an entire credit card brand. And a rival one, at that. Its takeover of Discover “reinforces the impression that corporate leaders are willing to take risks on big M&A again,” Chris Hughes explains. Don’t be surprised when Capital One becomes the largest issuer of credit card loans in the US.

Further Reading

An exodus of students has districts considering closing low-performing schools. — Bloomberg’s editorial board

If you take Bill Ackman’s approach to stocks, you don’t have to do much. — Matt Levine

Softbank’s shares doubled on AI excitement, but its core tech isn’t driving that boom. — Parmy Olson

The 3-point shooting contest between the WNBA and the NBA won’t fix sexism on the court. — Adam Minter

Which is more deadly: the snakes, spiders and sharks of Australia, or the guns of America? — Betsey Stevenson

After the Kansas City parade shooting, the NFL’s piecemeal approach to gun control won’t cut it. — J.A. Adande

The influence of Latin America's vibrant art scene is expanding beyond the region. — JP Spinetto

The Fed’s plane hasn’t landed yet — the economy is still a challenge. — Bill Dudley

Notes: Please send pork belly lattes and feedback to Jessica Karl at [email protected].

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.