[Eva]

It would make more sense to take away the tax break going into the 401ks. They can’t seize the money that is already there and exchange it for gov’t bonds. They just can’t do that. It’s not their money and it would be very difficult to tax it at the rate that it would have been going into the 401 k. My husband has been paying into his for as long as they have been in existence and before that, it was an ESOP plan, which was after taxes. How are they going to tell the difference?

[farlander]

So, effectively, they want to move everyone to compulsorily fund government by buying the bonds and ensure noone gets a fair market return, but a pittance of 3-4% barely breaking inflation ?

If they do this I’m moving whatever little I have offshore. At that point it’ll be cost effective.

[Fred]

That simply results in transferring money from taxed savings accounts to untaxed accounts, she said.

The stupidity is absolutely shocking, all a 401k does is DELAY when one pays taxes on the income, the taxes do not go away.... The hope is that when one starts making the withdrawals one will be in a lower tax bracket..

Eva - what you refer to is a Roth. With a Roth one pays the taxes the same year as the deposit, then, there are no taxes owed when one withdraws the money at a later date.

[21twelve]

“They can’t seize the money that is already there and exchange it for gov’t bonds. They just can’t do that.”

Watch.

[Buchal]

“They just can’t do that” is wishful thinking. They can and they will, if the history of other countries is any guide. Insofar as it would constrain the Federal government on economic issues, the Constitution is a dead letter.

[Alberta's Child]

In retrospect, it looks like I made a smart decision last year to borrow against my 401(k) account by selling off part of my bond portfolio.

Any changes in the law that adversely affect my 401(k) account might seriously tempt me to default on the loan and go live in the mountains.