Skip to comments.Keep Both Eyes On Your Retirement Funds As Fiscal Cliff Nears
Posted on 11/21/2012 6:51:24 AM PST by Tolerance Sucks Rocks
Americans hold about $17.9 trillion in retirement assets. These are found in the form of 401(k)s, individual retirement accounts and pension funds.
That money is not your own. If it were, you would be able to access it without penalty. But that is not the case. Taxes and onerous fees are tacked on if you take the money when you need it as opposed to when your benevolent government masters believe you should have it.
Congress established retirement programs like IRAs and 401(k)s in order to prop up the stock markets for the big banksters and make themselves look good. Americans have been fooled into equating a rising stock market with improving economic conditions. But when its propped up under false pretenses (by driving money into the market that would ordinarily be used elsewhere or through massive infusions of fiat currency via bailouts), it is like fools gold.
And now some are eyeing those funds as a big piggy bank to rob in order to pay off the national debt. Never mind that U.S. debt is a world-class delusion, as I have told you many times.
This actually began long ago. I first wrote about it here in 2009. Thats when Congressional Democrats were holding hearings to discuss the possibility that those funds could be confiscated and placed into universal guaranteed retirement accounts managed by the Social Security Administration. Their belief is that if the money is put into Treasuries, it would undo much of the money-printing damage done by the Alan Greenspan/Ben Bernanke Feds.
More hearings on this subject were held in 2010. They were presided over by J. Mark Iwry, senior adviser to the Secretary of the Treasury and deputy assistant secretary for retirement and health policy. Irwy believes 401(k)s and IRAs are unfair because they benefit the rich. But the plan to nationalize retirement plans was put on hold following the 2010 election. Unions are big advocates of a nationalized retirement system.
Now the topic is back on the table. As Congress searches for creative ways to feed the ever-growing Federal leviathan, that $17.9 trillion becomes an enticing option. Americas national debt stands at $16.3 trillion. The fiscal cliff, comprised of a huge year-end tax increase and $110 billion in cuts to Federal spending, is dead ahead; and the 1 percent (the sociopaths in government) is looking for ways to avoid the cliff that dont involve making significant cuts to Federal spending.
There is precedence for government confiscating the retirement funds of its citizens, so keep your eye on upcoming Congressional negotiations. A $17.9 trillion piggy bank plus $16.3 trillion debt equals a marriage that could be consummated in hell — or Congress, which is almost the same thing.
Been saying this for a while now....
Obama wants that money...
I turned my 401k to as much cash as I could. I figure that is safer for the fiscal cliff and if I need to withdraw it all and get the heck out of dodge.
Did you just take the 40% penalty?
I am really considering doing this but damn 40%??
...and I’ve been saying this for a while. If the government confiscates our life’s savings it will constitute the first shot fired in the next Revolution.
What will the gov. do, try to put a tax on each fund owned by a individual? Will it be a massive tax or a small tax? Will the tax be every year or a one time thing on the 401 K or IRA when a person goes to cash the fund out? What percentage would the tax be to the fund. I mean are we talking about 50% of the fund or what?
Well we can't have people being responsible with their savings and planning well for their retirement....that would simply be un-liberal!
We's all gots to emulate this...
I liquidated most of it but I have not withdrawn it yet. I am waiting for the proverbial show to drop before I do that. If the shoe were to drop, I hear Costa Rica is nice year round.
Can’t have my retirement accounts. Try it and they WILL bleed for it...
This slow compression of freedom and confiscation by government is going to cause a major explosion...only a matter of time as they keep pushing and pushing.
I thought the penalty was 10% (plus taxes, of course)
Many 401k’s are already removing the “cash option”.
They long ago removed your ability to roll out your 401k into your own plan while you’re still with the same employer.
Usually, the next “safest” option is heavy in gov’t treasuries.
This is a de facto takeover of 401k plans, albeit “voluntary” on the part of the person whose name is on it.
10% penalty (confiscation) + the withdrawal is taxed as income for the year.
I don’t think you can even do this with a 401, only with an IRA.
And, another twist, if you’re thinking of “borrowing” from your IRA - can’t do it. This is only available from your 401, and the payback plan guarantees you can’t harbor it out of the system with a “slow payback”.
We are already a socialist country. We like to keep the illusion that we are a free-market country where you get to work and to keep the fruits of your labor. We’re not. You work and government takes more than you get to keep. You only think that you own property. You don’t. The government slices off a percentage each year in what they call the “property tax.”
We’re already there. Many many thanks to all the a$$whole$ who voted democrat!
This will indeed start the shootin
You can take out a 401(k) early, if you pay the penalty.
The penalty can be avoided under some hardship circumstances, but the taxes cannot (and they’re at your highest bracket for the year, whatever that happens to be).
I’ve always been curious where the penalty money goes, other than the obvious “black hole” of the general fund.
Touch my 401k and I pick up a gun. Clear enough, Washington?
“Well we can’t have people being responsible with their savings and planning well for their retirement....that would simply be un-liberal!”
It’s all about “fairness” If I hear that term again I’m going to gouge someones eyes out.It pains me that hard work, responsibility, and preparation for the future is evil and unfair to the lazy grasshoppers
yeah that’s were I get the big number from..
taking it out eats most of it up.
We think alike here.
I’ve been thinking if Uncle Sham is bluffing, they win when you have most of the populace now with no savings and dependent on FedGuvInc in their old age.
No point in saving in a traditional bank account or CD since Uncle Sham is keeping interest rates artificially low.
Just another thieving Communist to lay the crosshairs over.
Except you can keep your money in a money market fund instead of a stock market investment.
It's not really a big deal to me if the government removes the tax deferment on the 401K. It gets taxed when I withdraw it in retirement anyway so this is just moving that up instead of delaying it. In essence that would be the government deciding to take their tax money now instead of saving it for the future. But given the debt situation, it doesn't make sense for the government to in effect "save" that tax revenue for a rainy day. It's already raining.
In truth, it might be better financially if the government taxes that money now instead of later. If taxes are higher later upon withdrawal, or I'm in a higher tax bracket later, I would save more money by being taxed now instead of later.
The whole idea of confiscating the money, taxing it at a higher rate, or setting up a new mandatory retirement on top of social security is hideous though. Social security is as financially obsolete a program as any that currently exist in this country. It needs to be abolished and we need the freedom to invest our own money our own way.
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