Personal Finance and Investing

the number of self-employed people in the 1970s was far fewer than now, and while that number has increased as time moves along, IRAs were not visible to the general public until Reagan sold it as the up and coming alternative to Social Security as banks, big banks, regional banks, and Wall Street licked itheir chops over the fees that would be earned in IRA investments.

In the 1970s you needed to have a Keogh HR-10 as a tax-deferred pension account for self-employed people. You might well not even know about them unless you used a CPA to file taxes. Surely musicians, writers, CPA's were informed, but not the general public.

Yes, Democrats went along with Reagan's IRA, most of them reluctantly, or unaware of the far-reaching implications. As you can see from the votes in Congress, Democrats were slightly opposed. Perhaps they saw it as a supplement retirement plan, which it was in its early stages, and didn't realize it could become a major stand-alone retirement plan that potentially dwarfed SS.

In my view Democrats would have been better off to support the lower end of the SS scale, and temper the COLA adjustments. Those flat % increases have really added up for high-income retirees.

Original IRA/Keogh legislation was the alternative to private sector pension plans, for those without private pensions.