The current tax codes have a HUGE impact on how to plan for retirement. Many people used to depend on pensions for their retirement. In the early 1900’s, the government started to give companies tax breaks for setting up pension plans. This incentivized companies to give out pensions, resulting in about half of Americans depending on these pensions by the 1960s. However, in the late 1970s companies started to shift to using 401k’s for retirement because they wanted employees to be responsible for setting it up and handling the accounts themselves. This allowed the companies to not have to set aside money for employee pensions. So as we have moved from pensions to 401k’s in the last two generations, retirement planning has shifted drastically. Many people haven’t learned the details about saving for retirement. There is a huge lack of education on this topic. With pensions, you never even saw the money taken out of your paycheck. What you received on your paycheck was how much you kept. Now, with 401k’s, you have to learn that it is not how much you make, but how much you keep that matters.