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Old 04-30-2010, 11:43 PM   #21
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I'm responding to this not because I'm a financial whiz (I'm not) but because I dislike the fearfulness and distrust of government being promulgated by some folks who play fast and loose with the facts. I tried to follow the links in the articles. The Bob Brinker link you gave did point to a Bloomberg article from January: "The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams". Nothing about the government taking anything. The second article had a dead link to what I think was supposed to be the same Bloomberg article, but it had been wildly mischaracterized.
Although I've been investing for well over 20 years, and interested in national and world news for much longer than that, I'm still learning. But one thing I have learned well is to consider the source. Read the original source whenever possible. Use the nonpartisan politifact.com, factcheck.org, and even snopes.com when you hear something scary, before you even begin to believe it.
If you are following someone who wants you to be scared, they are not a good leader and you should consider finding a better leader or better yet don't be a follower.. Get informed.
Thanks for posting.
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Old 04-30-2010, 11:49 PM   #22
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So, what percentage of your portfolio have you buried in your backyard? I may need to tweak my AA too.
She lives in New Orleans, dig a hole and you get a pond

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I could see them take away the tax deduction, which some say unfairly benefits high earners, and of course I wouldn't be surprised if higher taxes in the future made the 401K a not so good deal.
They took away the tax deduction for high earners a long time ago. Certainly by 1992 when I first started putting money into an IRA I was earning too much for a tax deduction. But I agree, they may remove it altogether or lower the threshold to capture lower paid folks.
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Old 05-01-2010, 12:04 AM   #23
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I'm far more worried about a net worth or "wealth" tax like they have in France. Especially when you see a chart like this(http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_1.gif) where the top 5% of citizens own 62% of US net worth and the bottom 80% of citizens own 15%. Only saving grace is that most politicians seem to be in the top 5%!
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Old 05-01-2010, 12:05 AM   #24
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She lives in New Orleans, dig a hole and you get a pond
You've got a point. My back yard is at her service. Nice dry and clean desert soil.
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Old 05-01-2010, 12:14 AM   #25
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Not losing sleep over this but when a source like US News and World Report Would Obama, Dems Kill 401(k) Plans? - Capital Commerce (usnews.com) starts talking about changes to the 401k plan, I'll start reading about it. I'm not going to bury my head in the sand. The idea of getting the government talons into retirement accounts has been floated out there before under government financial stress of a much lower level than what we have today. Losing sleep? No, but staying informed is always good.
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Old 05-01-2010, 12:25 AM   #26
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Most likely change to go back to where survivors have to take distributions over the life of the original 401k holder (i.e. the same percentage RMD's after the estate taxes are paid). Recall that they changed to allow those who inherit to reset the RMD clock I suspect it will modify to over the originators lifetime. The idea being that one could not keep money in an IRA/401k for more than 1 lifetime.
Hadn't heard this idea before. But I do think that it could be a viable idea politically - it has some populist angles and the revenue potential over time might be significant.

Of course I'm violently opposed, because I have a small part of my nest egg in an inherited IRA subject to RMD's over my lifetime.
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Old 05-01-2010, 01:23 AM   #27
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They took away the tax deduction for high earners a long time ago. Certainly by 1992 when I first started putting money into an IRA I was earning too much for a tax deduction. But I agree, they may remove it altogether or lower the threshold to capture lower paid folks.
While they have taken away the tax deduction on IRAs for high earners, those people can still deduct 100% of their 401k contributions. For now. I have heard several politicians mention that tax deductions on retirement account contributions are expensive (lost revenue) and that they disproportionally benefit people with higher incomes because they contribute much more to their retirement accounts than people with lower incomes. Also the 401k deduction is much more valuable for people in higher tax brackets than for people in lower tax brackets. Seems like a pretty low hanging fruit...
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Old 05-01-2010, 01:33 AM   #28
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You've got a point. My back yard is at her service. Nice dry and clean desert soil.
Umm.... I'll let you bury your own cash there.

Alan is right about our soggy soil, and in my case my house is 2.4 feet below sea level. If I should ever want to hoard cash I can always put it in the attic (next to the axe that many New Orleanians keep in their attics, but that's another story). For now, I think Vanguard and my bricks-and-mortar bank will do.
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Old 05-01-2010, 02:40 AM   #29
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Originally Posted by toofrugalformycat View Post
I'm responding to this not because I'm a financial whiz (I'm not) but because I dislike the fearfulness and distrust of government being promulgated by some folks who play fast and loose with the facts. I tried to follow the links in the articles. The Bob Brinker link you gave did point to a Bloomberg article from January: "The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams". Nothing about the government taking anything. The second article had a dead link to what I think was supposed to be the same Bloomberg article, but it had been wildly mischaracterized.
the second link worked for me, although it took a long time to load. It goes to a World Net Daily article by Jerome Corsi. I think these articles are all referring to a proposal by economics professor Teresa Ghilarducci, which was discussed on ER last fall in several threads:
401k pre-tax contributions no more?!?
Time Mag: Why its time to retire the 401 (K)
Americans Oppose Initiatives Limiting 401(k) Choices, ICI Says

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(snip) If you are following someone who wants you to be scared, they are not a good leader and you should consider finding a better leader or better yet don't be a follower.. Get informed.
Thanks for posting.
Well said!
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Old 05-01-2010, 06:43 AM   #30
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I just hope the cost of tin-foil isn't tied to the again rising commodities market, else how will we continue to be able to purchase hats?
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Old 05-01-2010, 06:44 AM   #31
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If you are following someone who wants you to be scared, they are not a good leader and you should consider finding a better leader or better yet don't be a follower.. Get informed.
Thanks for posting.
+1
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Old 05-01-2010, 07:06 AM   #32
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Even it it all came to be you could just pull out of your 401K and take the 10% tax penalty to avoid it if you are under 59-1/2. Yes we all want to minimize taxes on our retirement funds but it would be better than any government effort to force or control your finances. Also if this ever happened I would expect a huge decline in the market from everyone selling their 401K's. This would not leave much to be confiscated or taxed and would defeat any evil intent they have so I would not worry about it.

Exactly what I would do.

But don't forget the aprox. 50% of people who would like the government to take care of them. These are the same ones with no savings to speak of. They would undoubtedly get a minimum annuity from the program which would be better than they could do on their own. I think a lot of people would be on board for this.[Moderator Edit]
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Old 05-01-2010, 07:18 AM   #33
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I have been reading this, and am becoming a bit scared. Keep in mind that most folks have little to nothing in their retirement accounts, so what do they care?

Bob Brinker Fan Club Blog: Bob Brinker on Government Encouraging Savers to put 401K and IRA assets into annuities.

Obama to meddle with your retirement account?
Ridiculous!
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Old 05-01-2010, 08:14 AM   #34
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Originally Posted by toofrugalformycat View Post
I'm responding to this not because I'm a financial whiz (I'm not) but because I dislike the fearfulness and distrust of government being promulgated by some folks who play fast and loose with the facts. I tried to follow the links in the articles. The Bob Brinker link you gave did point to a Bloomberg article from January: "The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams". Nothing about the government taking anything. The second article had a dead link to what I think was supposed to be the same Bloomberg article, but it had been wildly mischaracterized.
Although I've been investing for well over 20 years, and interested in national and world news for much longer than that, I'm still learning. But one thing I have learned well is to consider the source. Read the original source whenever possible. Use the nonpartisan politifact.com, factcheck.org, and even snopes.com when you hear something scary, before you even begin to believe it.
If you are following someone who wants you to be scared, they are not a good leader and you should consider finding a better leader or better yet don't be a follower.. Get informed.
Thanks for posting.
This gets my vote for 'post of the year'!!
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Old 05-01-2010, 08:22 AM   #35
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Let's see, they are afraid to do anything with Soc Sec or Medicare, but they might confiscate our 401k's and IRA's? Seems far fetched to say the least...
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Old 05-01-2010, 09:21 AM   #36
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Not worried.
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Old 05-01-2010, 09:46 AM   #37
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While they have taken away the tax deduction on IRAs for high earners, those people can still deduct 100% of their 401k contributions. For now. I have heard several politicians mention that tax deductions on retirement account contributions are expensive (lost revenue) and that they disproportionally benefit people with higher incomes because they contribute much more to their retirement accounts than people with lower incomes. Also the 401k deduction is much more valuable for people in higher tax brackets than for people in lower tax brackets. Seems like a pretty low hanging fruit...
Absolutely agree with you on 401k's, and since they've already done the pullback on IRA deductions for high earners then it would seem all too logical to do similar with 401k's.
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Old 05-01-2010, 10:07 AM   #38
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I'm far more concerned about someone like Goldman-Sachs getting their hands on my money.
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Old 05-01-2010, 12:01 PM   #39
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Umm.... I'll let you bury your own cash there.

Alan is right about our soggy soil, and in my case my house is 2.4 feet below sea level. If I should ever want to hoard cash I can always put it in the attic (next to the axe that many New Orleanians keep in their attics, but that's another story). For now, I think Vanguard and my bricks-and-mortar bank will do.
In order to keep a sizeable portion of your portfolio out of the grubby paws of the gummint, you will need to hide more than a mere few $K. We are talking about coffee cans filled with Krugerands here. No paper money as it can rot.

Attic? With the storms, tornadoes, house fire potentials?

No, ma'am! In the ground it has to go. Like the nice, dry, clean soil of my backyard.
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Old 05-01-2010, 12:12 PM   #40
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In order to keep a sizeable portion of your portfolio out of the grubby paws of the gummint, you will need to hide more than a mere few $K. We are talking about coffee cans filled with Krugerands here. No paper money as it can rot.

Attic? With the storms, tornadoes, house fire potentials?

No, ma'am! In the ground it has to go. Like the nice, dry, clean soil of my backyard.
Ha ha! In your backyard, with the rattlesnakes, scorpions, and prickly pear? No way.

Actually, it's other animals that scare me. Although I don't really think I'll hide money away from the gummint or for Armageddon-like scenarios, I have read about home invaders who demand money from the homeowner and then if none is supplied, shoot said homeowner dead on the spot. Maybe a thousand in ones and fives would satisfy such an animal. Other than that, I have no reason to keep money anywhere but in the bank. And that is probably an unreasonably remote possibility since nobody has broken into my home (here) before.
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