Posted on 07/20/2008 1:38:20 AM PDT by TigerLikesRooster
Raiding the Retirement Stash
By Michelle Singletary
Sunday, July 20, 2008; Page F01
Would you still put money in a tax-advantaged retirement fund if you couldn't touch it until you retired?
And when I say you couldn't touch it, I mean you couldn't take out loans or withdraw funds under any circumstances.
If Congress were rewriting the rules for 401(k) s and similar retirement plans, that's what the Washington-based Pension Rights Center would recommend. Why this hard stance from a consumer-oriented group that works hard to protect and promote retirement savings?
A new study found that an increasing number of employees are raiding their retirement funds by taking out loans against their 401(k) accounts. Strangled by debt and rising consumer prices, workers are turning to these plans as the only stash of cash they have.
(Excerpt) Read more at washingtonpost.com ...
Ping!
Makes me wonder just whose retirement money it is anyway... the person who earned it, or the gubmint’s?
Strangled by debt...borrowing against the retirement account....mortgaging the future...hmmm, sounds like the government.
How about these people cut back on spending? Now THERE’S a novel idea, eh?
And when I say you couldn't touch it, I mean you couldn't take out loans or withdraw funds under any circumstances.
If Congress were rewriting the rules for 401(k) s and similar retirement plans, that's what the Washington-based Pension Rights Center would recommend.
I would be willing to accept those restrictions if we were talking about FICA contributions to Individual Retirement Accounts.
When the markets aren’t doing well, some folks take out loans because the gains from interest is grater than the market gains.
Also, in a falling market, they don’t lose any of the loan money.
Then only a FOOL would put money into it. Although it's not a perfect vehicle, They'd best leave it as it is.
It's good thing to start building a retirement and personal health funds plan with, if only more young people entering the work force would start paying themselves by opening one and putting funds into it habitually while they are young and healthy, and don't need much health insurance.
Later, they can roll these funds into other things like shares, metals etc.
Locking them out of reach, which is a nice way of saying "out of your control" and at the mercy of government crooks, who will have them spent years in advance of you ever putting money into them (like they do with social security) Is the same as throwing your money out the car window after you cash your paycheck.
It wouldn’t be long before the socialist government made them “equal” in that everyone would have to contribute according to ability (richer pay more, poorer pay less) and then on retirement receive a monthly payment according to staus, single receive x amount, married receive x amount, and x amount clawed back based on other income.
More grist for the debate.
http://www.nytimes.com/2008/07/20/business/economy/20view.html?ref=business
Means Testing, for Medicare
I heard the Federal Reserve now has toxic securities CMOs on its books now backing up the US dollar. That it first got some when it bailed out Bear Stearns. Bear Stearns got a capital infusions via a long term loan of USG Treasury notes etc from the Fed and the Fed got the CMOs in return.
The Fed has since done this swap with other troubled Wall St firms and is about to do it with Fannie Mae
Key problem is our currency being backed up by CMOs
How about means testing for legal immigartion into the USA?
Oh, no doubt. But this is how they’ll come after us. Those of us who’ve built our own retirement security will be “means tested” out of medicare and sosha security because “we don’t need it.”
Just like the Katrina handouts and aid went to those who did not insure and did not prepare. Responsible citizens could not get.... or got a lot less Gubbermint assistance because they has full insurance and paid out for years and years on such policies
The only entity that’s gonna raid my retirement stash is the government, when they decide responsible people with assets not only get no benefits, but have to prop up those who failed to plan and chose to live for the moment. It’s not just the later generations who’ll be penalized and taxed for people like that.
The NYT mentions means testing on lifetime income - boy, would that leave those who make 6 figures and spend it all (or more) in a world of hurt!
Exactly. I looked at the title of the article and held my breath waiting to find that they were going to impose a "one time" 15% tax on all wealth. This is a very important election. Osama would think nothing of imposing such a tax if he thought he could get away with it.
I am very afraid of something like that coming. Responsible people who save and live frugally will be penalized - makes sense to me!
Mr. P and I were just discussing retirement over breakfast. Some guys he knows who retired over the last few years are in their mid 60’s and running out of money. They took lump sum buyouts when they retired rather than pensions - the utility they work for could be in trouble so they don’t trust the pension system - and between that and their 401K funds they now don’t have enough.
We don’t know enough about them and their finances and financial advisors to know what they are doing wrong. It is scary to hear this when we are turning 50 this summer.
What is scariest to me is seeing so MANY people who are not planning for retirement, taking loans from or spending their retirement funds and have pools, new cars, etc. Next thing we know we will have them all clamoring for government to fix it all.........
There are tax advantages to a 401K. When you get what is perceived by the government to be a "gift" like that, there will be strings attached.
It would be the same with school vouchers. No, I am not against vouchers, except for me. Everyone should just be aware that the government does not "give" us anything.
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