Skip to comments.401(k) Plan Revamp Eyed By Senate Finance Committee
Posted on 09/14/2011 7:44:56 AM PDT by Red Badger
On Thursday, the U.S. Senate Finance committee will listen to proposals from a range of interests. On the table are such ideas as revamping the tax treatment of 401(k) plans to make the system more automatic, and possibly adding caps to make contributions less tax-favorable to higher-income workers.
The hearing comes as the so-called retirement deficient Income, the gap between the pension and retirement plans Americans have today and what is necessary to maintain living standards, is at a high of $6.6 trillion, according to the Retirement Research Center.
"Fewer than half of the working public currently have access to a workplace-based retirement plan, so the hearing will address ways to encourage more employers to sponsor and more employees to participate in 401(k)-type plans, individual retirement accounts and other vehicles, while maintaining and protecting the existing programs and savings that millions of Americans are counting on for retirement," according to a statement from the Finance Committee.
One controversial proposal comes from the Brookings Institute. Senior Fellow William Gale will talk about reinventing 401(k)s by substituting the current deduction for contributions with a flat-rate refundable credit that would be deposited directly into the saver's account.
Gale of the Brookings Institute, says that a flat rate refundable credit will:
1."Address long-standing concerns in the retirement saving system by improving incentives for most households to participate and by raising national saving.
2. Offset pressures created by the current weak economy for households to reduce their retirement saving.
3. Help solve the long-term fiscal problem facing the country by raising $450 billion over the next decade in a manner that is consistent with the principles of broad-based tax reform and distributes the fiscal burden in a progressive manner."
(Excerpt) Read more at abcnews.go.com ...
Keep your f’n hands off of my 401(k)!!! You a-holes have all but ruined Social Security for anyone under 50 and my private savings are all that I will have to retire on.
refundable credits, tax reform, distributing the federal burden...BOHICA, this can’t be good.
If you’ve worked hard, saved, and invested well, you will be penalized.
Take from the ant, give to the grasshopper....
The King wants his money.
But it’s not YOUR money. Nothing is yours. It’s all theirs...after all, they printed it.
Right. That approach will be good for the stock market. In the 1930s we had panic runs on the banks, now we will have a run on retirement investments. So how many trillions will be lost in the markets?
Ditto! Mess with my retirement accounts I’ll start destroying $#!+...
***Fewer than half of the working public... ***
It won’t be long before it will be reported that ‘fewer than half of the public is working...’. Just wait and see.
“”Fewer than half of the working public currently have access to a workplace-based retirement plan, so the hearing will address ways to encourage more employers to sponsor and more employees to participate in 401(k)-type plans, individual retirement accounts and other vehicles, while maintaining and protecting the existing programs and savings that millions of Americans are counting on for retirement,” according to a statement from the Finance Committee. “
and, by law if they do not have access to a 401K plan they can make a tax deductible contribution to a personal IRA....
what’s funny is they want to 1) means test for social security and reduce the benefits for the “rich” 2) considering capping the amount of $$$ the “rich” can personally fund their own retirements....hysterical...
Grab your money before its gone. Better to take the tax hit than lose it altogether.
Pull it or lose it....I knew this was coming!
I’m over 50 and I’ve watched my 401 go into the toilet so many times it’s not funny. I agree, these turds just keep looking for a way to take it away from us. I think I will cash it out and take what is left and find an island they don’t control and move to it. Course, if enough of us did it they’d find a way to declare war on the island. Shame on all of them.
Here is a responsible recommendation: TAX the distributions at the lowest CAPITAL GAIN rate. They are afterall a long term investment. Why tax them as regular income.
What you wanna bet that if you have a 401(k) plan, the govt will suspend your SS payments until you run out of funds. If you die before that, they seize it..........
I’ll spend every penny on hookers, booze and gambling before I let them have a penny. Even if my retirement plan after that is federal prison for tax evasion....
If a ‘run’ happens on the markets share of 401(K) FUNDS, the value of the shares diminishes at a logarithmic rate so that the final value approaches zero. Even if you have substantial shares in your 401(k) they will be worth little or nothing......
I’d stay away from the booze and gambling - the government takes a hefty cut from those activities.
Means testing for SS is likely in the future....so if you scrimped and saved, you’ll probably get scr****.
never gonna happen....
“Grab your money before its gone. Better to take the tax hit than lose it altogether.”
It’s a $450 billion tax on 401Ks over 10 years.
“Help solve the long-term fiscal problem facing the country by raising $450 billion over the next decade in a manner that is consistent with the principles of broad-based tax reform and distributes the fiscal burden in a progressive manner.”
1. The long-term fiscal ‘problem’ facing the country is excessive entitlement spending aka vote buying.
2. Since when is a tax increase “broad-based tax reform”?
2. Without high income earners contributing to 401(k)s, the managers of 401(k)s like Fidelity, Vanguard, Schwab, etc. will have to charge the lower wage earners higher fees, further driving lower wage earners into poverty (this is what the Marxist Muslim in the WH wants).
3. Lower income earners without access to a company sponsored 401(k) DO have access to retirement accounts. They are called IRAs and anyone with any kind of savings can open one and receive the tax advantages of a 401(k), but without the employer contribution which would simply be a wage increase if 401(k)s were not available.
Rest assured that whatever comes out of this committee will not be to the advantage of the American people, but will only increase revenues for the almighty FedGov. They want you to love big Brother.
How many of those employers don't have 401(k)s because of the nightmarish reporting requirements already in place to make sure that the highly paid employees don't take unfair advantage of the program. Anything the Democratic Senate will just make 401(k) programs vastly more difficult and fewer employers will deal with it.
My company just about gave up on its retirement program for this reason until we found a company specializing in doing the forms for a few hundred dollars separate from the investment company itself.
Be afraid, very afraid.
Yes they do - very successfully by devaluing the currency on a daily basis.