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Fiscal Cliff: Why Congress Might Have to Mess with the 401(k)
Time ^ | 11/29/12 | Dan Kadlec

Posted on 11/29/2012 11:20:58 AM PST by Perdogg

One of the earliest fears about tax-favored savings accounts like IRAs and 401(k) plans was that when this pool of savings grew large enough Congress would not be able to resist tapping it to help solve the nation’s debt problems. We’re about to find out if those fears—persistent for decades—have been justified.

Everything including the sacred mortgage deduction is on the table as lawmakers wrestle with the fiscal cliff, a year-end avalanche of scheduled spending cuts and tax increases. With a combined $10 trillion sitting in IRAs and 401(k) plans, retirement accounts make a juicy target. Some of this money has never been taxed, and under current law never will be.

(Excerpt) Read more at business.time.com ...


TOPICS: Breaking News; Business/Economy; News/Current Events; Politics/Elections
KEYWORDS: 0bamanation; 112th; 401k; apieceoftheaction; bho44; corruptbastards; debt; fairness; ghilarducci; nationalization; pension; pigford3; redistribution; retirement; savings; spending; spreadthewealth; taxandspend; theft; waivethis
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To: Perdogg

They touch mine and it’s war. I will have nothing left to lose. Period.


141 posted on 11/29/2012 7:34:28 PM PST by meyer (Proud member of the 53%.)
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To: Perdogg

They touch mine and it’s war. I will have nothing left to lose. Period.


142 posted on 11/29/2012 7:34:49 PM PST by meyer (Proud member of the 53%.)
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To: FreeReign

“Most “upper middle class” people don’t get any deductions because they have to pay the AMT.”

I guess it depends on the specifics, but the AMT Patch, as they call it, manages to exempt most upper middle class people. But yea, you can still get tripped up if you have, say, $150k income, high property and state income taxes, and 6 kids. You may well wind up having to pay 10% or so in federal income taxes.


143 posted on 11/29/2012 7:54:52 PM PST by BobL (You can live each day only once. You can waste a few, but don't waste too many.)
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To: Perdogg

They will let you drain your IRA/401K down to $0 (taxing you the whole time) before they let you qualify for any of the benefits the “grasshoppers” have been reaping for decades. I don’t believe they will confiscate them, but you can bet your butt they’ll hold it against you - for financial aid, determining Social Security payments upon retirment (a solution dreamed up by grasshoppers to save the program), etc.


144 posted on 11/29/2012 8:16:17 PM PST by kearnyirish2 (Affirmative action is economic war against white males (and therefore white families).)
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To: annieokie

When does the Revolt begin, and how will we know it started? >>>>>>>>>>>>>>>>>>

The formation of Committees of Safety and the closing of federal offices by State Committees of Safety, when the feds attempt to enforce Obama’s executive orders on environmental control which unconstitutionally require the closure of businesses , for example.

How to set up Committees of Safety:

http://constitution.org/mil/cos/cos_setup.htm


145 posted on 11/29/2012 8:25:32 PM PST by Candor7 (Obama fascism article:(http://www.americanthinker.com/2009/05/barack_obama_the_quintessentia_1.html))
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To: justlurking
RE :”The return on investment (ROI) from Roth 401(k)’s and Roth IRA’s are tax-free. Your contributions are taxed, but all withdrawals are tax-free — including all earnings.”

I see you made up your own name, They are called 401Ks and Roth IRAs, there is NO Roth 401K. That is a name you made up.

401Ks which they referenced are tax deferred just as I said.
Roth IRAs are savings of already taxed money so obviously you wouldn't pay taxes on it, however you don't have to pay taxes on the gains it gets during savings. But in return the gubment gets the taxes paid now not 30 years in the future as with 401Ks,

146 posted on 11/29/2012 8:30:48 PM PST by sickoflibs (Has Bohner caved to Obama again yet?)
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To: bitterohiogunclinger
RE :”Do they even read the propaganda they write?”

Yep, I pinged it for that reason. It is like he hates savings and independence in retirement.

Any sane government that is not evil would encourage that, savings for retirement.

147 posted on 11/29/2012 8:42:13 PM PST by sickoflibs (Has Bohner caved to Obama again yet?)
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To: DoughtyOne

They’re not counting defined benefit pension plans. They’re just counting IRA and defined contribution plans (401k’s, 403b’s). There are about $5 Trillion in each category.

http://www.ici.org/pressroom/news/ret_11_q2


148 posted on 11/29/2012 9:07:37 PM PST by Choose Ye This Day (There's no shame in attacking a criminal's bean bag. -- Ron Swanson)
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To: Choose Ye This Day

Okay thanks. Is it your take that the other plans will be able to avoid being taken over? I’m rather skeptical about that in the long run.


149 posted on 11/30/2012 12:52:27 AM PST by DoughtyOne (Hurricane Sandy..., a week later and over 60 million Americans still didn't have power.)
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To: ridesthemiles
The most I ever made in one calendar year was just over $62,000 GROSS. I benefited every year from the mortgage deduction, and would still be doing so-—if I earned enough money to qualify to even file a return—and if I didn’t already OWN my house, free & clear.

Just curious - how much did you buy the house for to benefit from the mortgage deductions? Were there other big expenses that allowed you to itemize vs. taking the standard deduction? T he standard deduction was always the best way to go for me (except for the year I had $20K uncovered medical expenses), so the mortgage deduction never applied.

150 posted on 11/30/2012 3:01:20 AM PST by trebb (Allies no longer trust us. Enemies no longer fear us.)
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To: abb
You “own” a house? Says what? That piece of paper on file down at the county clerk’s office? If they can expropriate 401k’s or IRA’s, they can disappear that deed on file that is “proof” of your ownership.

I understand what you say and I also agree that I don't really own it because if I don't pay annual taxes, they can take it away. I do hols a hard copy of the Deed of Trust which at leas makes it "mine" to live in and to defend - vigorously...

151 posted on 11/30/2012 3:03:31 AM PST by trebb (Allies no longer trust us. Enemies no longer fear us.)
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To: 1010RD
The pro-debt tax policies need to end, asap.

Agreed, but even more important is the assured debt spending policies...

152 posted on 11/30/2012 3:05:15 AM PST by trebb (Allies no longer trust us. Enemies no longer fear us.)
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To: sickoflibs
I see you made up your own name, They are called 401Ks and Roth IRAs, there is NO Roth 401K. That is a name you made up.

Do a search on Roth 401k. Or, you can just click this link:

http://en.wikipedia.org/wiki/Roth_401(k)

You really should do a bit of research before you accuse someone of making something up, ***wipe.

153 posted on 11/30/2012 5:33:23 AM PST by justlurking (tagline removed, as demanded by Admin Moderator)
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To: Political Junkie Too

“How would this actually work? “-PJ2

The government “guarantees” the principal in the account.

When the value of the stocks or mutual funds falls below that guaranteed level, which would be triggered later by the program itself, the guarantee kicks in. When an individual converts to the guarantee amount, the stock ownership is transferred to the fedgov. Individuals that accept the transfer earlier, could get a higher guarantee level.

This will be much easier than the confiscation of gold.


154 posted on 11/30/2012 6:30:10 AM PST by Triple (Socialism denies people the right to the fruits of their labor, and is as abhorrent as slavery)
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To: PeterPrinciple

Taxes are paid at the time the money is withdrawn from the 401(k), which can happen without penalty after the age of 65. The theory has been that when a person is retired, he/she is automatically at a lower income tax bracket than when working and contributing. This has been the reason why it has been such an attractive way to save. In addition, many companies contribute to their employees’ accounts if an employee’s savings reaches a certain level.


155 posted on 11/30/2012 6:54:25 AM PST by nanetteclaret (Unreconstructed Catholic Texan)
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To: Perdogg

I honestly can’t see how there would be any support for this, especially in the House. 401k plans are designed for middle income wage earners and have caps especially designed so they don’t treat high wage earners more favorably. The bad PR this would generate would be insurmountable by anyone who comes out and messes with these plans.


156 posted on 11/30/2012 7:02:24 AM PST by CityCenter (Compromise is the welcome mat to deception.)
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To: DoughtyOne

Somebodys gotta pay for deese Obama phones.


157 posted on 11/30/2012 7:09:20 AM PST by catfish1957 (My dream for hope and change is to see the punk POTUS in prison for treason)
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To: sodpoodle

This is what we get when we allow 47% of the dregs to vote themselves more and more money from the 52% of the earners who created it.


158 posted on 11/30/2012 7:22:50 AM PST by Fedupwithit (You gave him what he wanted. I gave him what he needed.)
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To: sodpoodle

This is what we get when we allow 47% of the dregs to vote themselves more and more money from the 53% of the earners who created it.


159 posted on 11/30/2012 7:23:09 AM PST by Fedupwithit (You gave him what he wanted. I gave him what he needed.)
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To: sodpoodle

Recently, O’Reilly interviewed communist toady Mark LaMont Hill about the current churn surrounding a tax on wealth. The toady literally was licking his lips at the very thought.

O’Reilly kept hammering him on how such a thing would be done (Bill maintained such a system was impossible) but the toady kept repeating that one could use percentages to do “the fair (spit) thing”.


160 posted on 11/30/2012 7:29:13 AM PST by Darnright ("I don't trust liberals, I trust conservatives." - Lucius Annaeus Seneca)
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