How will ObamaCare affect my 401k?

Vanity | 3/28/10 | self

[HDCochran]

I know that ObamaCare will impact the profitability and growth of investments in my 401k, but does it affect it even more directly? How are capital gains and dividends from stocks held directly in 401k treated and affected by the new medicare charge? What about from stocks in mutual funds held in 401k?

Will I be TRIPLE taxed?

[SumProVita]

IF....it looks as if that will ever take place, we will take it out before they can. ;-)

[MtnClimber]

They seized retirement funds last year in Argentina.

[richardtavor]

Eventually, they will go after our stocks and 401Ks. As the famous bank robber Willy Sutton said when asked why he robbed banks, he retorted, “because that is where the money is.” (I know he didn’t really say that, but the Libs have taken as their creed. We will be lucky to have anything left when these crooks are finished. Congress is like the Borg.

[mlocher]

If McCain wins - you have just put another ally for Obama in power.

A strong conflict between socialism and Conservatism has been inevitable for quite some time. If McCain would have won, we simply would have kicked the can down the road for another election cycle or two. The outrage over "baby steps to socialism" would not exist.

No, McCain should not be our choice in 2012. He cannot, or perhaps will not, change the direction of the ship. He would just slow it down.

I have faith that Americans will do the "right" thing and put the proper leaders in power. As the economy continues to slow and as more people see their 401Ks not growing and their paychecks stretched, they will be more engaged and outraged. Obama will be stopped.

[Frantzie]

You are missing the point. McCain has to go now. He has to lose in 2010. If he wins then you might as well forget your country. His loss will scare the hell out o fthe other RINOs. We need tough people NOW to save this country. We are out of time and it may be too late already. McCain will do everything to help Obama - you can bank on that.

[mlocher]

He has to lose in 2010.

OK -- got you.

[Oceander]

Right now, your 401(k) is not subject to additional tax so long as you don't withdraw any amounts from it (other than as otherwise permitted). The fascists, I mean democrats, have not yet gotten around to destroying the treatment of 401(k)s and other tax-favored private retirement accounts. However, any permitted withdrawals you make, such as once you hit the age where you have to take mandatory withdrawals, the amounts withdrawn will be subject to the full income taxation as ordinary income. In particular, as of right now, those withdrawn amounts should constitute "wages" or "compensation for services" - which is why they're subject to tax as ordinary income and not as capital gain - and are therefore not so-called "unearned income," which means that they shouldn't be subject to the expanded payroll taxes in Obastardcare.

I wouldn't count on that state of affairs remaining. In particular, as another poster mentioned, the unions - which clearly have control over the democrats, as witness how the democrats turned on a dime to please their union bosses over the "cadillac tax" issue - have demanded that the democrats seize all private retirement arrangements - 401(k)s, IRAs, and the whole panoply of other arrangements - and put them all into a single federal pension plan.

The obvious reason for this is that the union bosses have always used union pension funds as their personal piggy-banks and have basically raided the pension funds of union members for their own corrupt benefit. In order to make up for the stolen funds, they want all retirement plans - union pension plans as well as 401(k)s - all put into a single pot of money so that, basically, your 401(k) would be used to make up for the money that the union bosses have been stealing from the union pension funds.

When this happens, you will get a chit - an IOU - for the funds that will be seized from your 401(k), which will ostensibly give you the right to receive benefits from this new federal pension fund once you retire. Of course, by the time you retire your money will have long since been used up paying benefits for union members who have already retired, and your IOU won't be worth the paper it's written on.

In other words, the unions are going to use the coercive power of the federal government to steal your 401(k) funds for their own private use.

Until and unless both the democrats are removed from power and the unions are put back in their proper place - that is, the NLRA is either repealed or substantially rewritten - I would not contribute any more amounts to a 401(k) were I you, and I would be working on making the largest permissible early withdrawals I could from any existing 401(k) or other retirement arrangement, such as an IRA, for things like educational expenses, purchasing a home, or the other permissible early withdrawal purposes.

[Jim Noble]

How will ObamaCare affect my 401k?

Your 401(k) is going to be confiscated, and replaced with "guaranteed" bonds.

[ColdWater]

In particular, as another poster mentioned, the unions - which clearly have control over the democrats, as witness how the democrats turned on a dime to please their union bosses over the "cadillac tax" issue - have demanded that the democrats seize all private retirement arrangements - 401(k)s, IRAs, and the whole panoply of other arrangements - and put them all into a single federal pension plan.

I am not saying that that didn't happen, I just haven't heard that. What I heard was for a new system that would invest in treasuries and that would not affect existing 401ks.

[Oceander]

If it's what the unions have been talking about, it is the seizure of all private retirement arrangements, which would be placed into a single federal pot of money. If it's to be invested in treasuries, then that's just a boondoggle - there won't be any money left over, period - which is precisely what the fascists in Argentina did in 2006. This is a boondoggle because it would replace your own funds, owned by you, held for your benefit by a private custodian, and segregated from the claims of that custodian's other creditors, with a single gigantic IOU from Uncle Sugar that could not be negotiated or otherwise sold on the open market, and which could therefore only be paid by raising new taxes.

This is precisely the same sort of boondoggle that Social Security is in right now, and it is why Social Security is bankrupt now, because current revenues are less than current payments of benefits, and that big, fat "special" treasury bond issued for the benefit of Social Security is nothing more than a general, unsecured claim against future general tax revenues which, because the federal goverment will be running massive deficits for all eternity if Obastardcare remains in place, can only be repaid if new taxes are imposed and new tax revenues raised.

In short, if this arrangement goes through, any money of yours that goes into that system will be lost, as effectively as if you had just paid "protection" money to some stereotyped mobster in a b-grade movie.

[SUSSA]

[Oceander]

Yup.

[Dr.Deth]

Obama’s plan is to take the money from people who earned it, and share it with people who didn’t.

Close. It will be distributed only after properly skimmed various bureaucracies, corporate cronies, and other assorted political apparatchiks.

[PubliusMM]

Well, unless you in physical possession of those resources, the gubmint won’t even need you. They will simply call up the bank (chances are they own it already), and take it.

It’ time to take back the country.

[Daisyjane69]

http://market-ticker.denninger.net/archives/1830-401kIRA-Screw-Job-Coming.html

[CincyRichieRich]

Looks like a bunch of sarcasm here...I understand.

Seriously, though my opinion:

* taxation hurts corporations, small or large
* inflation raises prices, which are passed on to customers
* banks and other traditional DRIP or dividend issuing companies will be less likely to issue dividends or raise them and hold onto precious cash (Obama’s Goldman Sachs never issued divdidends, so no change to those limousine liberals)
* hard for companies to hire and expand, i.e., take chances and grow
* Obama’s Holder will challenge every acquisition calling it a monopoly, especially larger corporations

Bottom line, both 401ks and IRAs will be hurt by slower growth. Both are not safe from confiscation due to the need to redistribute our investments since we were so LUCKY to those less fortunate...it’s fair, you know.

Sorry, I dipped into sarcasm, too, so I’m a hypocrite. I feel better, though.

2010 and 2012 are the most important elections in the U.S. history...2008 election was to date, and we blew that. We can’t blow this one.