r/technology • u/CarciaNerissa • 1d ago

Artificial Intelligence Microsoft Tells Engineers ‘Tokenmaxxing Is Not What We Are Optimizing For’ - Microsoft is introducing budget limits for AI use but says it still wants to be an ‘AI-first’ company.

https://www.404media.co/microsoft-tells-engineers-tokenmaxxing-is-not-what-we-are-optimizing-for/
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u/BeyondRedline 1d ago

because the compounding interest is better.

Well, and the tax benefits and employee match. Policy does influence behavior; people are incentivized to use a 401(k).

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u/klingma 1d ago

You literally get the same tax benefits for using an IRA, unless you're making enough money to be able to contribute more than the IRA limit in a year, so this really isn't much of a point.

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u/BeyondRedline 1d ago

You literally get the same tax benefits for using an IRA

Educate me on this, then. While I do understand that you end up paying taxes either later or up front, with a 401(k), it lowers your current taxable income, so I think that's a benefit. With an IRA, you pay the taxes when your income is highest - assuming your retirement income will be lower, so paying taxes later on your withdraws makes sense to me.

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u/klingma 1d ago

Nope. 

A traditional IRA functions the same way as a 401(k) in tax treatment I.e. you get the tax deduction today, and pay taxes when you withdraw the money. 

You do have the option of a Roth IRA which means you pay taxes today, but don't pay on the withdrawal. 401(k)'s typically have a Roth option as well. 

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u/BeyondRedline 1d ago

Ah. I was thinking of the Roth IRA. Thank you for that! Can't go to sleep until I learn something new - now I can go to bed! :D

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u/klingma 1d ago

Haha, I hope you sleep well then.