Are you afraid that the government will confiscate your 401K to stay solvent?

[swampwiz]

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.

http://www.wnd.com/index.php?fa=PAGE.view&pageId=121891)

 

[LOL!]

No, I am absolutely not afraid.

 

[Gumby]

Don't worry. After the black helicopters take you to the FEMA concentration camp, you won't need your 401k.

 

[Htown Harry]

Check out this thread, Swampwiz, for more discussion and links to the actual proposals.http://www.early-retirement.org/forums/f52/annuities-wholesaled-by-obama-administration-48633.html

My answer to your question: No.

 

[ESRwannabe]

Am I afraid of it? Yes.

I think taxable accounts are the safest way to go for this type of risk. It would be difficult to mess with them without also affecting people rich enough to have lobbyists and other variations of bribery going on.

 

[plex]

As afraid as I am of lightning hitting me, or a planet busting meteor hitting Earth.

 

[RonBoyd]

Yes! That fear ranks right up there with the other biggies:

 

[Nords]

Why would the govt confiscate 401(k)s when they can just tax the heck out of them?

 

[zinger1457]

What is really scary is the number of people that actually believe what these talking heads say. With all of this government conspiracy talk going on it's just a matter of time before more Timothy McVeigh's start coming out of the woodwork.

 

[W2R]

No, I'm not worried about it at all.

On the other hand, I am quite a worrier in general. So, I made sure to engineer my retirement in such a way that I am getting income streams from a number of sources, not just one. Any one source of income could crater and I could still manage (just not as comfortably).

 

[73ss454]

I think the government will need a lot of Riot Gear, "they" should be affraid

 

[NW-Bound]

Why?

Yes, like Nords said, it would be far easier to tax the heck out of before-tax account withdrawals. And then, for after tax money, wouldn't a bit of money-printing inflation take care of that?

I don't know what is going to happen, but it is going to be gradual so as not to upset anyone too badly. Things have a way of evolving, like means testing for SS, higher premium for Medicare for people who can pay, etc... No conspiracy needed either.

I don't think it is going to be doomsday, but our living standard may have to be lowered a bit to match our lower productivity compared to years past.

So, I made sure to engineer my retirement in such a way that I am getting income streams from a number of sources, not just one. Any one source of income could crater and I could still manage (just not as comfortably).

So, what percentage of your portfolio have you buried in your backyard? I may need to tweak my AA too.

 

[Lister]

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.

 

[W2R]

So, what percentage of your portfolio have you buried in your backyard? I may need to tweak my AA too.

Now THAT would be an income stream that I wouldn't tap in to, unless the market crashes a lot worse than it has, KWIM?

Nah, I only have 8% cash and it's in two financial institutions. I never have any cash at home. I have meant to squirrel away a few thousand somewhere around the house, but haven't ever got around to it.

 

[Animorph]

Geez, no Social Security, no 401k, inflation and taxes going way up, I might as well just give up and spend it all now before they take the rest!

 

[W2R]

Geez, no Social Security, no 401k, inflation and taxes going way up, I might as well just give up and spend it all now before they take the rest!

That's it!! Spend, spend, spend! And be sure to keep working so you can keep contributing lots to SS and taxes.

 

[Koolau]

Not particularly concerned about this particular "threat", but it's clear the "ins" (whether dems or reps) are gonnna need a boatload more money to continue buying votes from us. The fact that they'll be using our money is disturbing, but we've probably reached a tipping point (more folks ON the dole than those providing the money). It' our own fault, of course, and maybe it's not too late. Still, I'm always surprised how gullible we all are to ever have let it get this far. Of course, it's just my 2 cents worth (wait, let me check my 1040, I think it's a BIT more than that!)

 

[ziggy29]

No. Not an outright "taking." There could be some tinkering around the edges to make it a little less of a good deal moving forward, and perhaps higher tax rates when we go to withdraw it, but I really don't see an outright seizing of retirement plans.

 

[FIREd]

No, not worried about my 401K being confiscated by the government. 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.

 

[meierlde]

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.

 

[toofrugalformycat]

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.

 

[Alan]

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

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.

 

[LARS]

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%!

 

[NW-Bound]

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.

 

[ikubak]

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.