Like GuitarStv said: Who's to say they don't levy a tax on real estate. Say a 1% federal property tax. Or, get rid of the mortgage interest deduction. Or, something else. What about taxable accounts. They could raise the dividends and capital gains taxes. Personally, since I save a lot, looking at it with your rhetoric I would say that:
1) I max out my 401k and play the "My average tax rate will be lower, so lets defer today" game.
2) I max out my Roth IRA and play the "The government might raise taxes" game.
3) I have taxable investment accounts in case they go after my retirement accounts.
4) I plan to have both a primary residence (which I effectively rent to myself) and possibly a rental house.
5) I max out my HSA to pay for medical bills for my future self.
Not totally fail safe, but it covers a lot of the bases.
I do like like 3 & 4 above.
However, 401k's, IRA's, HSA are hendering my ability to retire at an extremely young age.
If i want to retire or be FI'd by age 40, my self-controlled taxable account Freedom fund of say long term high quality dividend growth stocks will need to fully cover my expenses of say $15k/yr( will be 30% less at Retirement). At 4% returns, i would need $375k. For simplicity sakes, say the dividend growth rises above inflation each year, and if ever need be during another market recession with say less dividends paying out (though rarely do high quality dividend growth companies never pay out even during a crash for years) I could handle it by making $10k in income somehow that year.
Yes, the nontaxable accounts are the best at allowing you to accumulate more wealth over time until they allow you to withdraw without penalty and lower taxes at around a controlled by them age 67. (59.5 for investment returns with IRA's at much more limited deposit terms)
If I max out and invest $17,500 into a 401k, and an additional $5,000 into a Roth IRA and another $2,500 into an HSA, that leaves me with a controllable, liquid taxable account/Freedom Fund of only $10k/yr (if on a $60k before taxes paycheck, $35k AGI with fed taxes + SS + Medicare (state/local deductible) in all taxes minus 1k in health insurances , and $15k in expenses/year).
Even at 4% dividend returns, it would take me 23 years to reach Financial Independence($375k on $10k/yr savings) with maxing out all my non-taxable accounts starting at 26, without having to withdraw the 401k savings with 10% penalties plus taxes and limited deposit abilities of the Roth IRA's.
So yes, if I want to retire at age 67, with $750k- $1M if you include promotions...after working a "normal" life, i could if i am in the 2% of the population that have created a business and job i love and have passion for.
So age 49 isn't so bad for FI plus an additional $529,000 taxable account available and growing tax free but not allowed to touch for another 18 years. If my math is correct on all those tax calculations/scenarios O.o
OR
I could retire at age 40 or younger(36) by taking a more taxed and more double taxed on investments return, now and in my control. By only investing in a taxable account, and investing no amounts of money in a 401k, IRA, HSA, until after financial independence.
$2,500/month savings in my Freedom Fund after higher taxes with 4% dividend returns from my taxable account, will allow me to retire in 10.17 years. Age 36 (on $375k to cover my $15k/year expenses)
24% tax on working income, but for long term dividend/Freedom Fund returns, barely 5% taxes in my tax bracket while working on these investment returns. 0% at extreme retirement age up to $35,500 in dividend income.
At age 36 and FI'd my taxes would be $0 forever more. (even negative if i have dependents).
The U.S. government will of course think i am in extreme poverty for they have no concept of frugality and investing savings (at least not in modern times, anti-mustacian government).
So after thinking about it and attempting a rough draft of both sides of the equation calculation, i concluded that taking any employer match for a 401k is like free money and helps reduce your tax bill, however anything more starts to restrict you ability to retire extremely early though gives you more wealth in the very long run.
Another thing to consider is the probabilities of death after the age of 35.
If you are a frugal, minimalistic Cop, for 29 years and maxing out 401k's, IRA's, HSA each year, just to get shot randomly a month before your pension kicks in at age 55...sucks.
On your death, you taxable accounts get hit with 10% death withdrawl penalty, 25% taxes, 10% in death taxes. You may get a low balled pension severance to add to your inheritance. Hopefully you get Life insurance from you Company to compensate for your family.
But overall, you couldn't enjoy Financial Freedom, except on those 2 week vacations each year.
My theory is the government wants you to work longer and longer and longer, so you make more and more and more, and they collect higher and higher taxes from you.
For consumers they place sales tax on all consumer products, and place utility taxes on all utilities.
But if you live like a monk, save extremely well, and invest wisely, and not give all your investments to some 401k/IRA Hedge Fund managers to fee and play with without any risk to them, then you can retire extremely early, even in ten years.
This gives you a higher chance of enjoying financial freedom/retirement earlier in life and for longer time frams of life. As cash now is best, so is freedom now and as early as you can.
MMM should do a comparison post scenario of these choices after considering all variables.
Note: after FI, you can contribute the maximum of $17,500 to 401k's, $5k to Roth IRA's, and HSA's to keep your AGI at $0; because, you know, all those money employees are working hard 24/7 to make more money for you even after Financial Independence, and you don't want your money employees being taxed too.