Posted on 10/22/2008 9:42:21 AM PDT by Bodhi1
For those who don't know, here's what it is in a nutshell:
Employee 401k contribution are automatically deducted from their paycheck each pay period. This money is taken out before the employees paycheck is taxed. The contributions are invested at the employees direction into one or more funds provided in the plan. Employers often "match" employee contributions, but are not required to do so. While the investments grow in the employees 401k account, they do not pay any taxes on it.
The individual is using his or her property to ensure a prosperous future before the government has a chance to seize it. It is a great plan. I take advantage of it at work, as do many of my co-workers. You should see how attentive some of these folks are to the stock market.
The key part of the plan is found in the last sentence of the above quote. House Democrats are considering abolishing those tax breaks.
(Excerpt) Read more at allamericanblogger.com ...
Had to fix that, man.
How about we try a trial system of just using 5% of the 12.4% already taken for Social Security and putting that into an individual account? No, wait, that's similar to President Bush's plan which the Dems told us would kill Social Security.
I have the feeling that if Obama gets ahold of the tax code he will make it even more nightmarishly complicated and people will be begging for a flat tax or the FairTax by 2012.
Can I see the math on that? Most people are in a lower tax bracket during their retirement years.
What are you smoking? Seriously?
First and foremost, the amount of principal you would be able to put in an investment would be reduced by your marginal tax rate if you did so with "after-tax" dollars. That's a lot of money to be lost over appreciation.
Secondly, you will likely be in a lower tax bracket at retirement than during your working years. Now, instead of paying only your (lower) marginal rate on growth, you'll be paying it on principal too, but that rate is lower than the taxes you would have paid while working. If you invested with post-tax dollars, you would only be paying taxes on your profits, but those would be less because of the smaller initial investment, and you would have paid higher taxes on the principal in the first place.
Finally, many employers offer some form of 401k matching. This is the most reliable source of "free money" in the world, at least to someone who works for a living.
This is only the start. They will have to go after every pot of savings you think you’ve secured for your retirement. Where do you think the wealth to be spread is going to come from?
People stand not to lose just their 401(k) contributions but their employer's matching contributions as well.
What's next? Our IRA's? Damned right they are!
Democrats do not want you to fund your own retirement - they want you to be 100% dependent on the government, which is to say, on THEM.
Self-reliance is the enemy of the Democrat Party.
Actually the money is in TIAA-CREF and is the retirement plan for a non-profit aerospace company — they put in 9% of salary and can be matched up to 15%. Took money out of the market and put it in Traditional and bonds about two years ago. Family hasn’t lost a dime since that time. All 401K’s were rolled over into that plan and I keep a close watch.
Laura D’Andrea Tyson is Obama’s Economic Adviser. Unbder the Clinton’s she tried to get Employer Contributions to 401k’s taxed as “current income” and proposed a 15% RETRO-ACTIVE tax on them to make up for them not being taxed in the first place. That congress didn’t have the stomach for TWO retro-active taxes. Barney Frank has no such trepidations.
Laura D’Andrea Tyson is Obama’s Economic Adviser. Unbder the Clinton’s she tried to get Employer Contributions to 401k’s taxed as “current income” and proposed a 15% RETRO-ACTIVE tax on them to make up for them not being taxed in the first place. That congress didn’t have the stomach for TWO retro-active taxes. Barney Frank has no such trepidations.
Robbing people of their savings will NOT stand, and will cause a major rebellion. People could die over this kind of action.
This is not America.
This is the U.S.S.A.
Rejoice in the Glorious Revolution!
mcCain - the election was just handed to you.
NOW FOR PITY SAKES ) TAKE THE BALL AND RUN !!!!!!!!!
My theory is the income tax rate is going to constantly creep upwards. Why take that chance? Pay the Bush rate now and it’s less painful that it’s gonna’ be.
Gold doesn't burn.
You don't know the tax rates in the future, so it's a wager you're making with your money. Go ahead and pay off your largest tax deduction.
If you live 36 years after retirement the cost of living will probably double twice. So, how will you not outlive your money? Last year, the business section of the LA Times said that the average 401k is gone after 13 years.
If you pay 500 a month for 35 years, and you make 7.5% and are in a 33.3% state and federal marginal bracket, you'll have $1 million after 35 years. You deferred $70,000 in taxes (2,000 a year).
You'll pay $333,334 in taxes on the roll out and then taxes on the dividends when you reinvest and live the rest of your life. Total projected taxes in 35 years, $775,000-823,000.
If you pay $500 a month into a non-taxed deferred plan you'll pay 70,000 in taxes over 35 years of work. Nothing during 35 years of retirement. At 1 million in the fund, you'd have $75,000 a year tax-free.
Watch.
It will.
We are rapidly becoming a socialist nation. In socialism, little attention is paid to private property.
see my 36. Pay the tax now and no tax in the future.
Just read this line from the above link to see whose money it is:
““I want to spend our nation’s dollar for retirement security better. Everybody would now be covered” if the plan were adopted, Ghilarducci said.”
Retirement accounts are a HUGE pool of money (trillions of dollars) that is just sitting there waiting to be "spread around". My guess would be that democrats would either require 5% of all retirement accounts be "invested" in social security (in reality it would go into general revenue and SS would get more IOU's) that they will use to fund the rest of their social spending schemes. And the worst part is, you are pretty much held hostage, because if you try to pull your money out to avoid the tax, you get hit with early withdrawal penalties...
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