Posted on 07/25/2011 2:53:17 PM PDT by bkopto
Those who believe our government is too honorable to raid private retirement accounts had better wake up! The seriously dangerous and wounded animal we know as government is fighting for its survival. It will do anything short of dying, reducing spending, or revealing itself as the Ponzi scheme it truly is.
Your notions of integrity, law, and morality do not apply to this animal. The biggest, meanest man in town is trying to escape death and will use whatever means possible. Rightly or wrongly, he believes you are his antidote and he is going after whatever he can get.
One hurdle to preventing government from taking such action might be the stock market. The shift in asset allocations required in retirement accounts would presumably be detrimental to the stock market. Whether it would crash or not is moot. Any such action would certainly reduce its value, which might be the best protection retirees have.
Unless government spending is reduced to the point that new debt grows slower than GDP, most retirement accounts will diminish dramatically. This conclusion is independent of whether government raids your IRA account. Hyperinflation will eventually result from continued quantitative easing (printing of money). That will destroy most savings and all fixed income obligations like bonds and pensions whether these funds are in or out of IRA accounts.
Things are going to get ugly. Prepare for the worst and hope for the best.
(Excerpt) Read more at americanthinker.com ...
Only if you take it before 59 1/2 and are still working. The wife just retired at 55. After she separated from employment we took a small distribution. There was no 10% penalty. They witheld only on the gain based on the normal tax rate. Otherwise, they would have witheld the 10% also.
That’s true. But even then, the only hit is the difference, and who’s to say you wouldn’t be doing the same thing later?
They nab my 401k and I’ll consider it a green light for SHTF time.
>>Remember though that it’s a 10% penalty PLUS regular income tax.
Is it regular income tax, or regular capital gains tax? Probably depends on the investment. My IRA is self-funded with post-tax money. Since I give to a 401(k) at work, it never qualified for any tax breaks. But if I did the same my 401(k), I’d guess I’d pay regular income tax. But I must admit ignorance on these kinds of tax matters.
I’m thinking I should close it since it gains me nothing more than a brokerage account, which I already have.
Perhaps use it to buy ‘prepper’ supplies or expand my gardening capabilities.
However, you might want to consider that nine years ago today you could buy a Canadian dollar for 63 cents US. Today it will cost you $1.05 US.
Some facts for you. Canadian debt to GDP ratio is 35%. US debt to GDP ratio is 100%. Canada provides 20% of all the oil the US imports. Canadian banks are very stable and there has not been a large bank failure in Canada since 1923.
The Bank of Canada is scrambling to keep the Canadian dollar down. If TSHTF in Europe it will be very difficult.
I have my money in “Fred’s Bank”.....(white suit...front pocket)
It’s regular income tax on income you shielded from taxes when you put it into the 401k and any un-taxed matching funds that were added by your employer.
A theoretical advantage was that you’ll be in a lower tax bracket after retirement. That certainly applies to some folks, but things may change over time.
OK, then I think I’d probably only get hit with short- or long-term capital gains if I close my IRA. It is funded with 100% non-deductible contributions.
I plan to keep the 401(k) as that is way too big and will make me one of those ‘private jet flying’ rich people O’Bumma always talks about.
After retirement, you may want to convert the 401k to another brokerage IRA so that you can have a wider variety of investment options.
I see that happen a lot in Asia. It’s a sad, sad day when US citizens need to turn to China and Hong Kong for basic individual protections and liberties.
Most people don’t realize that the US is the ONLY nation that taxes your income no matter where you earn it, or where you live. You can live your entire life - move lock, stock, and barrel - to a foreign country and Uncle Sam wants a share of everything you earn - even if you never set foot in the US again.
EVERY OTHER NATION will tax you on what you earn inside their borders; outside the country? Don’t pay taxes on it. Not the US - we’re special, the IRS wants to get whatever it can from wherever it can, even if you never work a day inside the US. You have that little blue passport, you’re going to pay tax on every penny you make anywhere in the world.
This has to be the 50th time in the last three years this sort of thing has been posted.
The incestuous relationship among the Treasury, the Fed, and the big brokerage houses makes me think this ain’t gonna happen. They want your money in their coffers, not siphoned off into some bogus government “bond” or p*ssed down a hole by congress and the resident.
If I were the government, and I were financially desperate, I’d practice financial repression:
* I wouldn’t “raid” the accounts, but I’d tax the hell out of any withdrawals (first)
* I’d revoke the Roth account tax exemption, slowly at first. There’s no point in attacking them until they build up a big kitty. Then I’d start in with the minimum distribution penalties, and I’d add on death/inheritance penalties.
* After a while, I’d realize that the real money is in personal non-retirement accounts. How come France has a wealth tax and the US doesn’t? Why should the burden of supporting our society fall only on income and sales taxes, which don’t affect those who have accumulated wealth. Wealth tax proposals are a-comin’!
* I’d also augment restrictions on the trasferring of wealth outside of the country. Some sort of “ex-patriation” tax would be levied on offshore transfers.
I could go on, but you get the idea... the IRA is the least of our worries.
Even so, I interpret such a volume of postings as evidence for confiscation, what with Theresa Ghilarducci and her ilk beating the "fairness" drum, and the gangster government running out of dollar fuel.
I think, and I am afraid that the government is planning to stop all cash transactions. With everyone wanting direct deposit, debit payments, online payments, pretty soon there will be no cash. That means no under the table payments, no drug transactions, no hoarding cash, no bank robberies, no cash or coins whatsoever. No one will be able to have privacy for anything they buy or sell.
Can you imagine, no yard sales, no bake sales, car washes, etc. Everything will be electronic and people won’t be able to afford to do small transactions of any kind.
Cashing in accounts might be more costly than ever.
Any politician backing this should be targeted for selective elimination.........
Some info HERE.
Act like the government, borrow as much as you can and pay back later. If they seize your account, all they'll get is an IOU (kinda like Social Security).
Although Democrats have proposed laws to essentially nationalize IRA savings, these proposals have never moved forward even in the days of strong rat control. Democrats do not have pass any legislation to confiscate IRAs. They will let unsustainable spending crash the dollar and most savings. They can also increase future tax rates to confiscate excess withdrawals.
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