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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 ...
I've stopped contributing to my 401K this year. I'll never contribute to it again. The counterparty risk of the US government is too high.
Now, I have to decide whether to pull the plug on my existing accounts, take the tax hit, and be done with the theives and parasites.
Other than no longer contributing, how to get one’s own money without leaving the employer?
I have met a few wealthy Americans (and other nationalities) who are keeping large accounts in Hong Kong, with local Hong Kong branches of Chinese State-run Banks.
Why? Because if US Treasury / IRS comes demanding info on their accounts, the Chinese will tell them to get screwed. You can’t trust the Swiss Banks any longer, as they have sold their souls to be allowed to play on Wall Street.
Its sad its come to this, isn’t it?
What about Canadian banks?
You can transfer to an individual IRA/Rollover account.
One Tuesdays, Thursdays and Saturdays I think the government is spreading the rumors that it will raid IRAs and 401ks to convince people to stop contributing or even cash out to increase tax revenues this year.
I’m going to raid one of my accounts. The tax hit is meaningless. You pay income tax whenever you withdraw. The only added expense is the 10% hit.
“Other than no longer contributing, how to get one’s own money without leaving the employer?”
If you want half of it... you can have it. Close the account, take an early pay out.
10% off the top pentalty, then the rest is taxed as income.
You’re better not messing with it, and hoping the government doesn’t pull a fast one.
I will also add that the first congresscritter that votes to take my retirement funds will be deemed enemy of my state. So far, we have allowed the looting to be done throught the tax system, by professional crooks, but this would be a line that would trigger the go signal IMHO.
Would it be legal to quit the job for a few days, quickly roll the 401K over into an IRA, then get rehired (which I could do and I know I would be rehired), and cash out of the IRA?
These radical statists really believe that your money is their money
bingo...we have a winner...
GOVERNMENT loves a fearful 401 K weiner...who pays a huge tax grabbing their money out...and even loves it more when people don’t shelter their income PRE-TAX by not contributing to a 401K!
In CA with the Federal income tax at 35%, State at 11%, and 10% penalty means that 100K in withdrawl, for an already working couple, ends up being...45K. I belive serfs would rise up against their lords when the King took 1 out of every 2 livestock. This is worse.
[ The seriously dangerous and wounded animal we know as government is fighting for its survival. ]
AND its vampirous parasite the democrat party..
as well as, big government republicans most blacks and jews..
Oh! and literally all progressives.. and globalists..
with most being cross pollinated..
It’s been proposed by lefties to sieze private pension accounts in return for SS-type checks to their victims.
I took the hit and cleaned out a couple. That cash is mine, not theirs.
Like the thing says. No matter what you do inflation will eat up your savings.
It’s coming.
I always wondered, what good is it, if the government taxes the future withdrawals, at say, 70%?
That’s true. My point is that no matter when you withdraw, early or not, you pay all those income taxes on it. The only ADDED expense to early withdrawal of 401K is the 10% penalty.
you still will pay the taxes...the IRA will send you a 1099 and report your grab to the govt
And what is the total inflation hit over say 20 years? I’m leaving a big chunk in, but I’m taking some out this year. The only
reason I put so much in in the first place was the 5% company match.
They will never raid it IMO. If it passed the Senate, We would hear about it and hundreds of billions would be cashed out of the market the next morning,completely crashing it. People would take the 10% hit rather than lose 100% to the A*holes in DC. There is not enough money existing on the planet to satiate Washington.
I don't know for sure.
It is question of amounts. What is it worth for the Feds to pursue? Also, how "diversified" is the bank/geography? How easy is it for you to manage and what's your level of comfort with that bank/geography? For working stiffs like me with little net worth, having something off-shore that is easier to access and understandable (like Canada) might be good enough.
You do not have to quit to do that. Just tell them that you have decided that you want a different custodian, and are withdrawing all your money to do a rollover in 60 days.
Or you can do a direct rollover, but in a lot of companies it is faster to do a withdrawal or loan. Talk to your human resources department if you have one, or your IRA custodian about whatever rules they have.
Also consider vesting. If you are not vested, you may only get some of your company match. But your contributions and earnings on that money is yours and can be demanded at any time. They have no right to keep it (at least not yet).
You're right - at least on Tues., Thurs. and Sat.!
I’ve got all of my money safe in Russian banks. ;-)
Once you approach age 59 and 1/2 it is generally a good idea to withdraw funds from your IRA and invest it elsewhere.
But you have to be aware of the tax impact of those withdrawls.
When you become fully retired and live on investment earnings, you can compute IRA withdrawls to minimize the tax impact.
For example, you can alternate your charitable giving. Do two years worth of charitable giving in 2011 and take a large IRA distribution in 2011 to offset.
In 2012 no charitable giving and a small IRA distribution.
You worked hard to build the IRA nest egg, so it is important to work hard to not give it to Obama.
If and when the Feds get around to the legislation, I'm sure that the confiscation would have a retro-active date, thus locking out those looking to liquidate their accounts upon news of such legislation. The parasites aren't that stupid.
Remember though that it's a 10% penalty PLUS regular income tax.
The Baraqqi campaign is working.
My daughter works at one of the big mutual fund outfits that holds a lot of 401k and IRA accts. She called me an hr ago and said they’ve never had a flood of questions on this subject like they did today.
As long as they are friends of Putin, that's great!
And don't forget - ALWAYS PAY YOUR TAXES! ;>)
Arrest them for grand theft and put them in jail with Madoff.
The tax hit is meaningless. You pay income tax whenever you withdraw.
.......unless you bump up another tax bracket.
I'd rather pay the taxes now, given the counterparty risk of the US Government and given the uncertainty of future tax rates. I expect to be in a lower tax bracket at retirement, but who knows? At the rate things are going now, my future tax bracket/rate will be the same as it is now, if not higher! - so why contribute now in the face of these real, future risks?
“but this would be a line that would trigger the go signal IMHO.”
Yep!
I will also add that the first congresscritter that votes to take my retirement funds will be deemed enemy of my state.
This I completely agree with. There are not enough secret service people to protect them from the public wrath.
She said “without leaving the employer”. You can’t roll a 401k to a private IRA while you are still employed by the company that sponsors the plan.
I think there is a decent possibility that that age requirement will be raised between now and then.
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.
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