Posted on 11/16/2012 11:45:13 PM PST by rocksandbroncs
It may be time to take the tax hit and withdraw funds from private retirement accounts before they are forced into long term T-bonds.
The Obama administration is reportedly quickly moving on plans to nationalize private 401k and IRA retirement accounts, and replace them with government sponsored annuities(aka Treasury bonds that the Treasury currently can’t sell to anyone but the Fed).
National Seniors Council Director Robert Crone warns: “This whole issue is moving forward very quickly. Already there is a bill requiring all businesses to automatically enroll their employees in IRA plans in which part of every employee’s paycheck would be automatically deducted and deposited into this account. If this passes, the government will be just one step away from being able to confiscate all these retirement accounts.“
(Excerpt) Read more at silverdoctors.com ...
And what you speak of as an “income test” is known as Section 415 Anti-Discrimination Testing.
Plans with more than 100 participants undergo annual anti-discrimination tests to ensure that highly compensated employees are not receiving beneficial treatment under the plan. These tests compare the contributions and deferrals of highly paid workers and owners to the rest of the eligible employees. Highly compensated workers cannot contribute greater than 25% more than their fellow workers on average. Employees with contributions over the limit must undergo corrective action.
My company auto enrolls all eligible new hires at 3%. They can opt out but most don’t. My company matches up to 6% with each pay and it is 100% vested which is a very generous plan. Participants can also raise or lower their contribution % throughout the year but are capped at the current contribution limits.
If I were in a certain age bracket and my 401(k) account was my biggest asset, a government "seizure" of this kind would be a huge incentive for me to simply withdraw the money without reporting it as taxable income. For that matter, I'd have no incentive to ever file a tax return again in my life.
This is expected. Once the bond markets club us, the government will go to the ONLY large pot of cash remaining, which are private retirement accounts.
They will seize those accounts, and replace them with a fixed annuity (i.e., monthly payment when you retire). That way the government gets to hold (i.e., spend) that cash, and it will pay for another 10 years or so of deficits.
The only way out of it is to have the money in hard assets, but even that is difficult, as the best assets are real estate, and that is already (and still) on steroids.
People, it’s either the above, or it’s a huge round of new federal taxes (i.e., no more Bush tax cut, new huge carbon tax, VAT, etc.). The only thing that I’m sure of is that something has to give, because this country is nowhere close to wanting to cut spending.
And every election from now on will be about health care and retirement. The repub's want to take away and the dems want to give you more. Debt? Who cares. Price of gas? So what. Cut the military in half? Just gimme mine and let me watch the Kardashians
...before the government owns us. They don't have to own us-just be able to control us.
it may not happen soon, but likely will eventually happen.
I am at a loss as far as where to ‘hold’ my meager retirement savings. Small 401-k will likely decline with 0bama in office. Property as an investment seems to draw high property taxes. Gold is (or will be) taxed at high levels when over $1000 is ‘sold’ which is less than 1 ounce.
C/D interest levels stink. No good investement for the small invester...
any freeper ideas appreciatd.
“Already there is a bill requiring all businesses to automatically enroll their employees in IRA plans in which part of every employee’s paycheck would be automatically deducted and deposited into this account.”
We need a Bill number to heck if this is true.
I remember some years ago this story popped up about some meeting where some woman wanted to confiscate 401K’s and IRA’s but nothing came of it.
To dump out of 401K’s and take the huge tax hit on speculaton is a very risky thing. People need to be sure there is something in the works before making such a move.
“....anyone know how the Roth is affected....thanks in advance”
I too want to know how my IRA is going to be affected.
I really suspect this is just scare talk. But nonetheless I sent emails to the financial adviser that manages my IRA as well as an email to our GOP senator asking if there is any validity to this.
I suggest you do the same if you want information that could be considered accurate.
Indeed it is. Just one more in an ever growing list.
So while the Gold Bugs and the rest of our loonie news sources try to drum up fear, the Progressives are not hiding, this is no big secret they tell us exactly what they want to do and will proceed if it takes 20 year to do it just like any Commie Campaign, just look at Castro!
BTW, Investment News is a Weekly Financial Planner type Newspaper with lots of street cred in the Industry, this ain't some blogger in his underpants...
Also read the rest of that thread....
http://www.freerepublic.com/focus/f-news/2959947/posts?page=54#54
bump for later
The WSJ in a book they published and what do do with your 401k, credits the 401k to a IRS worker named Cohen who petitioned his superiors to develop something in the code that would mimic the 403(b)'s that teachers have.
It may have been the only time in history that the IRS did something right...
That is the problem with an angry pants suit type like Warren, she can say crap like this and get away with it....
“More fearmongering from bullion peddlers?”
Yea, what will they think of next, Barry taking over health care? Oh wait...
Just buy guns.
The article on which this blog is based is TWO YEARS OLD. It was posted on the website of the National Seniors Council. It referred to a hearing TWO YEARS AGO jointly sponsored by Treasury and Labor to look into lifetime income options in 401(k) and defined contribution plans.
However, having said that, I don’t disagree with the headline of the blog. The Obama Administration would like to seize all 401(k)s in the name of giving people a low cost annuity and have Social Security manage everything.
The guy who called this conference, Mark Iwry in Treasury, HATES 401(k)s and all the people called to testify are extreme leftists and Communists who also HATE 401(k)s because it puts retirement ownership and control in the hands of the people. They don’t like that because people who save for retirement get to have a better retirement. They call those people RICH.
But what it’s all about is the most successful people in society being targeted to take away the fruits of their success. It’s PURE EVIL.
Obama won't get a compliant House. But he will test many proposals like this one against them and look for one with some traction and hammer it through with RINO support. I doubt this would be the one. But people should not underestimate the power of his class warfare message and his charge that Republicans are trying to "crash the economy". The issue he picks (maybe tax increases or a new federal financial authority) will be chosen to be both "unless you pass this the markets will crash" and "not passing this will only benefit the rich". Then he will get the compliant media to play those messages, engineer a market crash if the House votes it down, and ram it past the RINOs. It will actually be quite easy for him, although he will only be able to do it once or twice at most.
Yeah. Because this type of scare article won’t benefit the business which is hosting it. No sireee. No conflict of interest here.
What about barry just going around congress and executive ordering this action? Who would stand up to him?
He is already acting outside the law in a number of other ways, so what’s to stop him, his media? His senate?
He has more flexibility now.
Does anyone seriously doubt that Obama’s spendthrift henchmen (and women) have designs on that great big pot of money protected as 401K’s and IRA’s?
They won’t go for overnight total confiscation but they will come after it.
They will first require all 401’s to offer a Government T-Bill fund as an option.
Then they will move to require a certain percentage be invested in the T-Bill fund.
IRA’s are a little different but you can bet they will do somethng there as well.
Perhaps require a certain percentage be invested in T-Bills once you hit retirement age.
I wouldn’t count on Republicans to prevent this either.
This is a way to channel money into the treasury while still claiming they did not allow taxes to be increased.
Even though he doesn't have to worry about their votes any more, he is smart enough not to pick a big target like confiscation of 401k's to do with an EO. He can nickel and dime them to death with EO's and that won't surprise me. But if he wants to win on a big issue, he will demagogue the class warfare aspect and ram it through the House.
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