I cut off my 401k contributions about 2 months ago. Every dime of that is going into a bi-weekly SHTF fund for guns, ammo, and supplies. I can take the rest out but have a hefty (~20%) fine if I do it. How long is too long to wait. I don't want $1000s to just disappear and I don't want to lose 20%. WTF...
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Will the Government 'nationalize' your private 401k retirement savings?
- Thread starter melensdad
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- 401k retirement
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My uncle has been telling me for the last 10 years that the government will find a way to get a hold of that money in the 401k plans. I said... They can't it is pretaxed. Also why would they. They get their money with interest when we take it out.
Well, looks like he was right.
Rammer
Well, looks like he was right.
Rammer
We should all be learning and paying attention to what occurs in Greece as the US is headed that way in a few years.
Prometheus
Master
The only reason I have mine is to get the matching 3% from my employer.
I can and will yank it at the first talk of nationalizing ANY retirement pensions or accounts. Last minute they will include it all.
I only deal in precious metal ETFs anyway, so it's not going to be a hit to regular stocks.
Today is just another example that if you aren't in the know (and probably only .0001% of investors are) you'd do just as well in Atlantic City as you do on wall street.
I can and will yank it at the first talk of nationalizing ANY retirement pensions or accounts. Last minute they will include it all.
I only deal in precious metal ETFs anyway, so it's not going to be a hit to regular stocks.
Today is just another example that if you aren't in the know (and probably only .0001% of investors are) you'd do just as well in Atlantic City as you do on wall street.
hornadylnl
Shooter
- Nov 19, 2008
- 21,505
- 63
Something I just thought of on this.
My 401k is invested in a couple different funds. If the .gov nationalizes it, will they sell my shares of the funds and add it to the general fund or will they leave it in my original investments? I'm sure it would be the former. Now my next question is what percentage of stocks owned are tied to 401k money? If the .gov sells off all those shares, how much money will be drained from the stock market? That would be one hell of a crash.
My 401k is invested in a couple different funds. If the .gov nationalizes it, will they sell my shares of the funds and add it to the general fund or will they leave it in my original investments? I'm sure it would be the former. Now my next question is what percentage of stocks owned are tied to 401k money? If the .gov sells off all those shares, how much money will be drained from the stock market? That would be one hell of a crash.
Most likely you dont really own stock,equilent share of stock.Only own it if you have it in your hand. Know what I mean? Look at your statement ,probibly says equivilent share.
Thats the way the companys Ive worked for have done it.
hornadylnl
Shooter
- Nov 19, 2008
- 21,505
- 63
But what I'm asking is what is the .gov going to do with the dollars in my 401k? One way or another, my account dollars are invested in the market. Will the .gov take my dollars out of the market and put it in the general fund? If so, how much money is going to be pulled from the market and wouldn't that cause a collapse?
Prometheus
Master
We can look at what other countries have done as a future prediction.
First we know that virtually every politician in washington is corrupt. Be it diane fineswine selling no bid contracts (some to her husbands firm) to senators getting spanked for insider trading...
Aside from that, they will appoint some idiot who failed in the private sector to "direct" all these nationalized accounts.
If said director likes Apple, they won't sell apple stocks. If said director hates guns they will sell all the S&W stock (as an example) because S&W makes things that the government shouldn't be politically involved with, or whatever other B.S. reason. S&W goes bankrupt because it's stock is worthless over night.
Any company that takes a stand against XYZ new .gov policy will see all their stocks dumped on the market and their company fail because they pissed off uncle sam.
I said in another thread, most people don't realize just how f'ed this country is and that the Republic is dead. "Walking dead" like the guys who were in the silo when it exploded. They were walking dead, absolutely nothing could be done to stop it. It sucks, but thats the way it is.
There is a way to get all of your 401k out without paying the penalty.
My Insurance/ Finance guy told me. I don't remember every detail but it goes like this:
You start your own business.....on paper. You then transfer all your 401k money to this business. It's now your money to do what you please.
I'm missing a couple of steps in there......it's been a few years since I talked to him about it.
My Insurance/ Finance guy told me. I don't remember every detail but it goes like this:
You start your own business.....on paper. You then transfer all your 401k money to this business. It's now your money to do what you please.
I'm missing a couple of steps in there......it's been a few years since I talked to him about it.
my last job I had a roth 401k, so I've already paid taxes on it. So they'd be "taxing" what I already had "taxed" and would be "taxed" again when I reach age 78, have it long enough to die 3 months later and then have all of it "taxed" again.
WHAT A CROCK.
This is why I don't do the 401k anymore. I save it every 6 months equivalent whatever my previous deduction amount was and I place it where it might be safer, such as private bank accounts possibly ran by sexy snow bunnies is Switzerland.
WHAT A CROCK.
This is why I don't do the 401k anymore. I save it every 6 months equivalent whatever my previous deduction amount was and I place it where it might be safer, such as private bank accounts possibly ran by sexy snow bunnies is Switzerland.
November 19, 2008
Updated: November 26, 2008
Q:
Are congressional Democrats talking about confiscating IRA and 401(k) investment accounts?
My mother has recently brought up a rumor that Nancy Pelosi and Harry Reid endorse a plan for the goverment to take people's 401Ks to make up tax dollars. Is this true and where did my mother get the information? (she can't tell me).
A:
No. There's no plan to seize these accounts. One House witness at a committee hearing proposed to allow some people to trade their old accounts for a new type that would be less risky.
We've had many queries about this doozy. They all lead back to a Nov. 4 report posted by the Carolina Journal, a publication of the conservative John Locke Foundation of Raleigh, N.C. Its headline proclaimed, "Dems Target Private Retirement Accounts: Democratic leaders in the U.S. House discuss confiscating 401(k)s, IRAs." The report is wrong. There's been no such discussion.
What has been discussed is changing 401(k) and Individual Retirement Accounts in the future by limiting the deductibility of donations, and offering as an alternative a $600 tax credit and a new type of account with an annual return guaranteed by the government. That's a controversial idea to be sure, but it's a far cry from proposing that the government seize retirement assets that investors have already salted away in 401(k)s or IRAs. Nobody we know of is proposing anything like that.
The Carolina Journal report claims that Democrats on the House Education and Labor Committee held hearings Oct. 7 on "proposals to confiscate workers’ personal retirement accounts." The report describes in particular the testimony of Teresa Ghilarducci, a professor at the New School for Social Research in New York City. We've reviewed Ghilarducci's written testimony and a video recording of the entire hearing, both of which are posted on the committee's official Web site and are available to anybody who cares to read or listen. Contrary to the Carolina Journal report, nobody at the hearing talked about confiscating or seizing accounts. We also contacted Ghilarducci independently and asked if she's expressed support for confiscation. She told us in an e-mail message that she hasn't:
What she proposes is strong medicine and has been sharply criticized by conservative commentators including Rush Limbaugh and the editorial page of The Wall Street Journal. She would force all workers to save 5 percent of their annual income in a new type of retirement vehicle, which she calls a Guaranteed Retirement Account. These savings could not be controlled by workers like IRAs and 401(k) assets, but would instead be deposited with the government. Workers could not touch the money until retirement, she says, and even then the savings could not be drawn out any way workers might desire, but would be converted to an annuity – a guaranteed stream of income for life. Ghilarducci argues that these new accounts would avoid stock market risks; the government would guarantee that the savings earn a 3 percent annual return on top of inflation. The government would also pay each worker $600 a year in the form of a tax credit, which would help workers who now earn too little to take advantage of a tax deduction because they owe little or no federal income tax anyway.
At the Oct. 7 hearing, Ghilarducci further proposed that Congress address the recent stock market drop by allowing workers to trade their existing 401(k) or IRA accounts for her proposed Guaranteed Retirement Accounts. (Her words can be heard starting at 33 minutes and 23 seconds into the video of the hearing.)
-Brooks Jackson
Update, Nov. 28: Rep. Miller issued a statement denying any intent to seize 401(k) assets. In response to a Wall Street Journal editorial, he said:
Updated: November 26, 2008
Q:
Are congressional Democrats talking about confiscating IRA and 401(k) investment accounts?
My mother has recently brought up a rumor that Nancy Pelosi and Harry Reid endorse a plan for the goverment to take people's 401Ks to make up tax dollars. Is this true and where did my mother get the information? (she can't tell me).
A:
No. There's no plan to seize these accounts. One House witness at a committee hearing proposed to allow some people to trade their old accounts for a new type that would be less risky.
We've had many queries about this doozy. They all lead back to a Nov. 4 report posted by the Carolina Journal, a publication of the conservative John Locke Foundation of Raleigh, N.C. Its headline proclaimed, "Dems Target Private Retirement Accounts: Democratic leaders in the U.S. House discuss confiscating 401(k)s, IRAs." The report is wrong. There's been no such discussion.
What has been discussed is changing 401(k) and Individual Retirement Accounts in the future by limiting the deductibility of donations, and offering as an alternative a $600 tax credit and a new type of account with an annual return guaranteed by the government. That's a controversial idea to be sure, but it's a far cry from proposing that the government seize retirement assets that investors have already salted away in 401(k)s or IRAs. Nobody we know of is proposing anything like that.
The Carolina Journal report claims that Democrats on the House Education and Labor Committee held hearings Oct. 7 on "proposals to confiscate workers’ personal retirement accounts." The report describes in particular the testimony of Teresa Ghilarducci, a professor at the New School for Social Research in New York City. We've reviewed Ghilarducci's written testimony and a video recording of the entire hearing, both of which are posted on the committee's official Web site and are available to anybody who cares to read or listen. Contrary to the Carolina Journal report, nobody at the hearing talked about confiscating or seizing accounts. We also contacted Ghilarducci independently and asked if she's expressed support for confiscation. She told us in an e-mail message that she hasn't:
Teresa Ghilarducci, Nov. 18: It is utterly ridiculous [to suppose] that I advocate seizing 401k assets.
Ghilarducci was one of six witnesses at the Oct. 7 hearing, convened by chairman George Miller of California, a Democrat, to examine the impact of the financial crisis and stock market meltdown on workers' retirement accounts. Ghilarducci has long proposed limiting tax deductions for money put into 401(k) and similar retirement accounts and setting up a new type of account instead. Ghilarducci touts the idea in a book published earlier this year and in an opinion article published in the New York Times on Sept. 26. A spokesman for Democratic Rep. Jim McDermott of Washington state, a member of the tax-writing Ways and Means Committee, has been quoted as calling her idea "intriguing" and "part of the discussion," but so far nobody in Congress has adopted it in the form of proposed legislation.
What she proposes is strong medicine and has been sharply criticized by conservative commentators including Rush Limbaugh and the editorial page of The Wall Street Journal. She would force all workers to save 5 percent of their annual income in a new type of retirement vehicle, which she calls a Guaranteed Retirement Account. These savings could not be controlled by workers like IRAs and 401(k) assets, but would instead be deposited with the government. Workers could not touch the money until retirement, she says, and even then the savings could not be drawn out any way workers might desire, but would be converted to an annuity – a guaranteed stream of income for life. Ghilarducci argues that these new accounts would avoid stock market risks; the government would guarantee that the savings earn a 3 percent annual return on top of inflation. The government would also pay each worker $600 a year in the form of a tax credit, which would help workers who now earn too little to take advantage of a tax deduction because they owe little or no federal income tax anyway.
At the Oct. 7 hearing, Ghilarducci further proposed that Congress address the recent stock market drop by allowing workers to trade their existing 401(k) or IRA accounts for her proposed Guaranteed Retirement Accounts. (Her words can be heard starting at 33 minutes and 23 seconds into the video of the hearing.)
Ghilarducci, Oct. 7: I propose ... that the Congress allow workers to swap out their 401k assets, perhaps at August levels, for a Guaranteed Retirement Account. Just a one-time swap, trading your 401(k) for a Guaranteed Retirement Account that will be composed of the equivalent of government bonds that pay a 3 percent real return.
Note that she used the word "allow." This proposed swap would be voluntary, the opposite of a seizure or confiscation. And many might find such a trade attractive. Note also that she said "perhaps at August levels," suggesting that Congress might replenish the value of beaten-down stocks in IRAs and 401(k) accounts before making the swap. That would be quite a generous offer; the Dow Jones Industrial Average dropped nearly 17 percent between August 1 and the day of the hearing. Far from proposing to "confiscate" accounts, she proposed to restore their value. Congress has not acted on her suggestions.
Standing By a Falsehood
We contacted the John Locke Foundation to ask about the basis for the "confiscation" claim. We wondered if the Carolina Journal's reporter knew something about the plan that we didn't. Spokesman Jon Ham said: "[W]e, as the saying goes, 'stand by our story.' "
Ham argued that holders of 401(k) accounts and IRAs would feel "coercion" to convert those accounts into Ghilarducci's proposed GRAs. He said: "Even though transferring of a 401(k) to a GRA would be 'voluntary' under Ghilarducci’s proposal, the loss of the 401(k)s tax advantage makes it coercive, with the intent of forcing individuals to transfer their accounts to a GRA. ... Absent the loss of the tax advantage, we would not have described the Ghilarducci plan as 'confiscation.' "
But Ham's argument won't wash. Even if there were coercion to convert an IRA or 401(k) account to a GRA account, it would be a rather serious exaggeration to describe it as "confiscation." The old account owners would still own them, in a new type of account. And anyway, Ham is simply wrong to claim that there would be any coercion.
What Ghilarducci proposes is to pay for her proposed $600 tax credit by taking away the deductibility of money put into an IRA or 401(k) over $5,000 per individual, per year. (IRAs for those under age 50 would actually not be affected, since the current limit for them is $5,000 anyway.) This would certainly reduce the incentive for upper-income workers to put more than $5,000 into such accounts in future years, but it would in no way reduce the tax advantage of keeping money already in those accounts. All interest, dividends and capital gains realized inside those accounts would continue to go untaxed until the account holder withdraws the money. Ghilarducci told us:
So much for "confiscation." We don't endorse or oppose Ghilarducci's ideas. But it's simply a fact that neither she nor anybody we're aware of is proposing a government seizure of retirement accounts.We contacted the John Locke Foundation to ask about the basis for the "confiscation" claim. We wondered if the Carolina Journal's reporter knew something about the plan that we didn't. Spokesman Jon Ham said: "[W]e, as the saying goes, 'stand by our story.' "
Ham argued that holders of 401(k) accounts and IRAs would feel "coercion" to convert those accounts into Ghilarducci's proposed GRAs. He said: "Even though transferring of a 401(k) to a GRA would be 'voluntary' under Ghilarducci’s proposal, the loss of the 401(k)s tax advantage makes it coercive, with the intent of forcing individuals to transfer their accounts to a GRA. ... Absent the loss of the tax advantage, we would not have described the Ghilarducci plan as 'confiscation.' "
But Ham's argument won't wash. Even if there were coercion to convert an IRA or 401(k) account to a GRA account, it would be a rather serious exaggeration to describe it as "confiscation." The old account owners would still own them, in a new type of account. And anyway, Ham is simply wrong to claim that there would be any coercion.
What Ghilarducci proposes is to pay for her proposed $600 tax credit by taking away the deductibility of money put into an IRA or 401(k) over $5,000 per individual, per year. (IRAs for those under age 50 would actually not be affected, since the current limit for them is $5,000 anyway.) This would certainly reduce the incentive for upper-income workers to put more than $5,000 into such accounts in future years, but it would in no way reduce the tax advantage of keeping money already in those accounts. All interest, dividends and capital gains realized inside those accounts would continue to go untaxed until the account holder withdraws the money. Ghilarducci told us:
Ghilarducci: If people put money into 401(k)s they could keep it there, and taxes would continue to be deferred until withdrawn. It is unthinkable that Congress would take a tax break away for activities already undertaken.
-Brooks Jackson
Update, Nov. 28: Rep. Miller issued a statement denying any intent to seize 401(k) assets. In response to a Wall Street Journal editorial, he said:
Rep. Miller, Nov. 14: I do not support ‘abolishing’ 401(k)s, moving these plans, or changing their tax status, plain and simple. The truth is that Democrats in Congress are working to preserve and strengthen 401(k)s.
According to a new study from the financial advisory firm HelloWallet, more than $70 billion is drawn out of retirement accounts each year in cash or loans to pay for non-retirement needs. People in their 40s are the worst violators, with nearly a third raiding their retirement accounts for daily expenses. Article Source: Retirement Savings.
It is a point that pro-government types use to try and paint individual retirement accounts as bad and should be replaced with more government control and confiscation. The $70 billion headline number sounds bad until you realize that there are trillions in private retirement accounts. I also noted that he's posted a political point in an Indiana gun forum from California.
Of course, it IS their money. Poor decisions are still the right of those who make them.
