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Thread: Media starting to SELL 401K confiscation.

  1. #1

    Media starting to SELL 401K confiscation.

    Financial Media is starting to "sell" the public on the 401K & IRA confiscation plan (aka "Guaranteed Retirement Accounts").

    __________________________________________________ ___

    Time to rescue America's retirement plans

    Commentary: Savings reforms need to be on Obama's radar, and soon

    By Robert Powell, MarketWatch
    Last update: 7:01 p.m. EST Nov. 6, 2008

    BOSTON (MarketWatch) -- Add to the list of things Barack Obama must do after he becomes president on Jan. 20: Fix the nation's retirement system and fast. And I'm not talking Social Security. That's the least of our worries.

    It's time for this country to fix how Americans save and invest for retirement, including IRAs but especially the 401(k), the employer-sponsored retirement plan of record for half of working Americans. Nearly 30 years after being introduced, the 401(k) has proven -- in some ways -- to be an abject failure and now would be as good a good time as any to overhaul it. Otherwise, Joe the average 401(k)/IRA investor is going to be in big trouble.

    [...]

    It's starting to look like a train wreck of immense proportions. The government will be spending billions of dollars in the decades to come bailing out average Americans who don't have enough set aside to pay for basic living expenses if something isn't done now.

    Best of both worlds

    What is that something? Ghilarducci suggests combining the best features of a 401(k) plan with the best features of traditional pension plans to create what she calls a guaranteed retirement account (GRA), a type of cash-balance pension plan (that many employers now offer) or sovereign wealth fund.

    Under her plan, all workers not enrolled in an equivalent or better defined-benefit pension would have the choice of enrolling in their 401(k) -- with all its known problems -- or enrolling in the GRA. In the GRA, she said, workers would set aside a minimum of 5% of their salary in investment funds that earn a rate of return guaranteed by the federal government, say 3% plus inflation. That money would then be converted into a life annuity upon retirement.

    [...]

    __________________________________________________ ___
    You haven't heard the last of this folks... IT IS COMING, because they are starting the sales job in the financial press first.

    Which means (most probably) another significant downturn in the market here in December (including GM, Ford & Chrysler "defaulting" on their pensions & turning them over to the PBGC as part of their bankruptcy/bailout deals) ... in order to get the general public BEGGING for something like this.... right after the new year, the press will publish all kinds of polls saying that the public DEMANDS that "something radical be done" to save pensions/401K's.

    Then (next spring) Obama will pull the trigger.




    If you haven't already done so (and why haven't you?) ... start seriously considering your exit plans.



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  3. #2
    Didn't want to pay the penalty for withdrawal, but it looks like I will after all.
    Quote Originally Posted by Occam's Banana View Post
    These days? That's always what has passed for conservatism.

    And exactly the same thing goes for (modern) liberalism, too.

    They just disagree about what should be forced upon whom.

  4. #3
    Quote Originally Posted by acptulsa View Post
    Didn't want to pay the penalty for withdrawal, but it looks like I will after all.
    Well, ONE WAY, or ANOTHER... you're going to get "penalized" AND taxed on it.

    And they KNEW that... it is/was part of the "plan" all along.


    See Gary North's "The Trouble with Retirement" article -- http://www.lewrockwell.com/north/north212.html -- it's one of the BEST summaries of what *IS* currently going on and what is *about* to come down that I've ever read (despite the fact that he wrote & published it FIVE years ago).

  5. #4
    They failed with socail security, now the want a sequel?! UGH! I'm glad I cashed out my 401k!

  6. #5
    Quote Originally Posted by acptulsa View Post
    Didn't want to pay the penalty for withdrawal, but it looks like I will after all.
    +1. Mine is from a former company, but I will still have to pay a penalty.

    GRA's, huh? Great, just great. So essentially, they want to turn your 401k into a government bond, and force you to contribute 5% a year to it so they can pay you 3% interest plus a government-underestimated inflation rate? And they will pay you by printing more money which lowers the value of each dollar even more? Give me a break. What if you want to make more than the 3+inflation? You won't have the choice to do so privately?
    "I'm not just trying to win or get elected. I am trying to change the course of history" - Ron Paul

  7. #6
    The referendum on the free market has spoken. The majority have said it is a failure and therefore the government most take it all over. The tsunami against the free market is now a dark line on he horizon and moving our way.
    War; everything in the world wrong, evil and immoral combined into one and multiplied by millions.

  8. #7
    Quote Originally Posted by Bruno View Post
    +1. Mine is from a former company, but I will still have to pay a penalty.

    GRA's, huh? Great, just great. So essentially, they want to turn your 401k into a government bond, and force you to contribute 5% a year to it so they can pay you 3% interest plus a government-underestimated inflation rate? And they will pay you by printing more money which lowers the value of each dollar even more? Give me a break. What if you want to make more than the 3+inflation? You won't have the choice to do so privately?
    Pretty much.

    Actually, it sounds like they've added a required "employer matching" of another 5% (so in fact 10% of your income) -- and then they "promise" that the GOVERNMENT will also add in some "matching" money (which will of course appear from that "magical place" called the future!)

    And 3% is all you're going to get... because the government knows BETTER than you do. (I mean obviously this is true, right... you've seen the stock market lately, right?).


    The thing I find MOST hilarious about all of this is that they repeated say things like "humans don't know how to invest their money wisely" and "people make bad investment decisions" -- I mean OK... what is the alternative?

    I mean are we going to hire "non-human/non-people" to make better investment decisions? Are there ALIENS that we can hire? Or are we going to use chimpanzees and darts?

    Or are they somehow admitting that THEY (the "government" and these fancy-pants economics professors) are NOT humans and NOT people? (Because, well if they were humans or people... then by their own definition they would NOT know how to invest money wisely, would they?)


    But no doubt the general public will LOVE this!

  9. #8
    Quote Originally Posted by klamath View Post
    The referendum on the free market has spoken. The majority have said it is a failure and therefore the government most take it all over. The tsunami against the free market is now a dark line on he horizon and moving our way.
    Actually, the "majority" have been TOLD that the free market doesn't work.

    Just like they will be SOLD on the idea that the "gummint" knows best.

    As Mogambo Guru would say: We are So Friggin Doomed!



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  11. #9
    How wonderful that we'll have not one, but two Social Security systems soon! How magnificent that the power brokers will have not one, but two trust funds to raid and rob!!
    Quote Originally Posted by Occam's Banana View Post
    These days? That's always what has passed for conservatism.

    And exactly the same thing goes for (modern) liberalism, too.

    They just disagree about what should be forced upon whom.

  12. #10
    Quote Originally Posted by WRellim View Post
    Pretty much.

    Actually, it sounds like they've added a required "employer matching" of another 5% (so in fact 10% of your income) -- and then they "promise" that the GOVERNMENT will also add in some "matching" money (which will of course appear from that "magical place" called the future!)

    And 3% is all you're going to get... because the government knows BETTER than you do. (I mean obviously this is true, right... you've seen the stock market lately, right?).


    The thing I find MOST hilarious about all of this is that they repeated say things like "humans don't know how to invest their money wisely" and "people make bad investment decisions" -- I mean OK... what is the alternative?

    I mean are we going to hire "non-human/non-people" to make better investment decisions? Are there ALIENS that we can hire? Or are we going to use chimpanzees and darts?

    Or are they somehow admitting that THEY (the "government" and these fancy-pants economics professors) are NOT humans and NOT people? (Because, well if they were humans or people... then by their own definition they would NOT know how to invest money wisely, would they?)



    But no doubt the general public will LOVE this!
    That is truly hilarious! I knew they were Reptilians all along.

    Well, considering those people are the same ones who created the problem, why would anyone ever trust them? I know all of us here won't, but how will the Obama supporters convince themselves that it is a good idea? Or maybe it will be easy because Obama can do no wrong.
    "I'm not just trying to win or get elected. I am trying to change the course of history" - Ron Paul

  13. #11
    Quote Originally Posted by Bruno View Post
    +1. Mine is from a former company, but I will still have to pay a penalty.

    GRA's, huh? Great, just great. So essentially, they want to turn your 401k into a government bond, and force you to contribute 5% a year to it so they can pay you 3% interest plus a government-underestimated inflation rate? And they will pay you by printing more money which lowers the value of each dollar even more? Give me a break. What if you want to make more than the 3+inflation? You won't have the choice to do so privately?
    With the bailouts that have already been announced and the ones that have not yet been announced, a lot of new Treasury debt issuance will be required. Where will they find all of the buyers? Yep, your friendly guaranteed government retirement program.

    Brian

  14. #12
    Even aside from this plan completely robbing everyone, someone needs to tell these brain-dead politicians that borrowing money today means paying more back tomorrow. I get the feeling they never got the memo.

  15. #13
    I've seen a few of these articles now. Some mention "confiscation" of current 401k balances and others just talk about a new plan going forward. This plan would, of course, take away the tax favored benefits of a 401k and make the new system "appear" to be the more attractive option. But what about the current 401k account balances? I know the government would like to get their hands on all that money but wouldn't they essentially be crashing the markets by doing that? It doesn't make sense to me? Would there be a way they could pull it off or would they most likely just leave those currently invested funds alone and set up the new system that all future contributions would go into it?

  16. #14
    Quote Originally Posted by smsnead2 View Post
    I've seen a few of these articles now. Some mention "confiscation" of current 401k balances and others just talk about a new plan going forward. This plan would, of course, take away the tax favored benefits of a 401k and make the new system "appear" to be the more attractive option. But what about the current 401k account balances? I know the government would like to get their hands on all that money but wouldn't they essentially be crashing the markets by doing that? It doesn't make sense to me? Would there be a way they could pull it off or would they most likely just leave those currently invested funds alone and set up the new system that all future contributions would go into it?
    They are going to crash the markets if they take away the tax incentives. Taking away those incentives would mean no more employer matching into your 401k.

    At least that is how I am understanding it.

  17. #15
    Quote Originally Posted by ItsTime View Post
    They are going to crash the markets if they take away the tax incentives. Taking away those incentives would mean no more employer matching into your 401k.

    At least that is how I am understanding it.
    That is true as well. Employers could no longer deduct their matching 401k contributions and they wouldn't do it anyway because they would also now be forced to match the 5% of your salary under the new program. That amount would also be deductible to the employer so it would just be a matter of where the contributions were going at that point. Employees would also no longer be able to contribute tax-deferred dollars so they would be less likely to contribute to their 401k as well. So, I agree that it would seem that tax law changes such as what they are taking about would be hugely detrimental to the markets. But nothing compared to just confiscating the accounts. Wouldn't it be sort of a forced liquidation type scenario for them to get their hands on the money? Wouldn't that crash the markets? There wouldn't even be enough buyers, would there?

  18. #16
    Quote Originally Posted by smsnead2 View Post
    That is true as well. Employers could no longer deduct their matching 401k contributions and they wouldn't do it anyway because they would also now be forced to match the 5% of your salary under the new program. That amount would also be deductible to the employer so it would just be a matter of where the contributions were going at that point. Employees would also no longer be able to contribute tax-deferred dollars so they would be less likely to contribute to their 401k as well.
    Not just "less likely" to contribute. Why would anyone in their right mind invest in a 401K account (or any retirement account) that is not funded through tax deductible dollars and does not grow tax-deferred (not to mention the inflated cost and poor choice associated with the programs)? They would simply invest the money in a non-retirement account.

    Brian



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  20. #17
    My guess that if they go this route they will pass an ex post facto law that allows them to tax anyone that had an 401k at 50%. This would force the people that have them into holding their money in the 401k's. This is to stop the mad rush to get your money out. It is all about manipulation folks.
    War; everything in the world wrong, evil and immoral combined into one and multiplied by millions.

  21. #18
    Quote Originally Posted by WRellim View Post
    Financial Media is starting to "sell" the public on the 401K & IRA confiscation plan (aka "Guaranteed Retirement Accounts").

    __________________________________________________ ___

    Time to rescue America's retirement plans

    Commentary: Savings reforms need to be on Obama's radar, and soon

    By Robert Powell, MarketWatch
    Last update: 7:01 p.m. EST Nov. 6, 2008

    BOSTON (MarketWatch) -- Add to the list of things Barack Obama must do after he becomes president on Jan. 20: Fix the nation's retirement system and fast. And I'm not talking Social Security. That's the least of our worries.

    It's time for this country to fix how Americans save and invest for retirement, including IRAs but especially the 401(k), the employer-sponsored retirement plan of record for half of working Americans. Nearly 30 years after being introduced, the 401(k) has proven -- in some ways -- to be an abject failure and now would be as good a good time as any to overhaul it. Otherwise, Joe the average 401(k)/IRA investor is going to be in big trouble.

    [...]

    It's starting to look like a train wreck of immense proportions. The government will be spending billions of dollars in the decades to come bailing out average Americans who don't have enough set aside to pay for basic living expenses if something isn't done now.

    Best of both worlds

    What is that something? Ghilarducci suggests combining the best features of a 401(k) plan with the best features of traditional pension plans to create what she calls a guaranteed retirement account (GRA), a type of cash-balance pension plan (that many employers now offer) or sovereign wealth fund.

    Under her plan, all workers not enrolled in an equivalent or better defined-benefit pension would have the choice of enrolling in their 401(k) -- with all its known problems -- or enrolling in the GRA. In the GRA, she said, workers would set aside a minimum of 5% of their salary in investment funds that earn a rate of return guaranteed by the federal government, say 3% plus inflation. That money would then be converted into a life annuity upon retirement.

    [...]

    __________________________________________________ ___
    You haven't heard the last of this folks... IT IS COMING, because they are starting the sales job in the financial press first.

    Which means (most probably) another significant downturn in the market here in December (including GM, Ford & Chrysler "defaulting" on their pensions & turning them over to the PBGC as part of their bankruptcy/bailout deals) ... in order to get the general public BEGGING for something like this.... right after the new year, the press will publish all kinds of polls saying that the public DEMANDS that "something radical be done" to save pensions/401K's.

    Then (next spring) Obama will pull the trigger.




    If you haven't already done so (and why haven't you?) ... start seriously considering your exit plans.
    Why? This article doesn't refer to confiscation.

  22. #19
    Quote Originally Posted by acptulsa View Post
    Didn't want to pay the penalty for withdrawal, but it looks like I will after all.
    Paying taxes and the 10% penalty? Not smart.

  23. #20
    Quote Originally Posted by Met Income View Post
    Paying taxes and the 10% penalty? Not smart.
    Or the stocks in you retirement could tank.

  24. #21
    Quote Originally Posted by smsnead2 View Post
    I've seen a few of these articles now. Some mention "confiscation" of current 401k balances and others just talk about a new plan going forward. This plan would, of course, take away the tax favored benefits of a 401k and make the new system "appear" to be the more attractive option. But what about the current 401k account balances? I know the government would like to get their hands on all that money but wouldn't they essentially be crashing the markets by doing that? It doesn't make sense to me? Would there be a way they could pull it off or would they most likely just leave those currently invested funds alone and set up the new system that all future contributions would go into it?
    They very well *might* set up the whole new GRA thingee first.

    But eventually, they WILL want to "roll everything up" into one massive bureaucracy... and that WILL mean "seizing" the 401K and IRA funds that are already in existence (but of course, it will NOT be called "confiscation" no it will be sold as a program to "save" and "stabilize" people's retirement funds).

    How can they actually pull it off ? Simple...

    First they will "freeze" all 401K accounts (probably via "Executive Order") -- and IMO probably also any and all IRA accounts as well (including Roth IRA's) -- and to show "compassion" the freeze will probably have a few exceptions to allow some small "rationed" withdrawals (say $2,000 max per month to retirees, etc).

    THAT will effectively prevent anyone from SELLING any of their stocks or Mutual Funds. Will it affect the markets? You're damn right it will... (but amazingly enough, it might make the markets GO UP -- at least temporarily -- Wall Street is just WEIRD that way. And with the worldwide LOVE of Obama as "savior" they are likely to give him the "benefit of the doubt" because surely Obama only intends GOOD things, right?)

    THEN... they will mandate that "control" over those accounts be transferred to some new "agency" that will oversee the new "GRA's" -- with the Social Security or other operation stepping in to handle the "initial transition period" -- while the new bureaucracy is quickly legislated (wow, lookee here, we had this "bill" all ready to go... who knew?) and then "built" (just like the Homeland Security Department).



    You see, people who are afraid that the government will confiscate GOLD are just not thinking correctly -- almost no one HAS gold coins now, so what would be the point?

    Confiscating Gold Coins made sense back in 1933 because the nation's "savings" was kept in circulating gold coins (some individually, but majority of it in banks) and in "bearer notes" as currency.

    THINK about that for a minute. THAT WAS UNPRECEDENTED!!!
    How could FDR close banks nationwide via Executive Order? How could he CONFISCATE and ORDER people (and banks) to turn in their Gold Coins and get nothing more than paper dollars in exchange? How could he then DEVALUE those same dollar by 69% a few months later? Wouldn't THAT cause a major disruption and panic and disorder? Well, did he do it anyway? YUP.



    But today, there is no point in confiscating gold coins -- because the nation's "savings" is substantially kept in 401K's and IRA's of one type or another --
    and the government KNOWS about all of those things! (remember all of that paperwork you filled out? The required Social Security No being attached to the account, etc.) -- and on TOP of that, NO ONE actually "controls" these accounts themselves -- they ALL have some type of "trustee" or "managing firm" that is the ACTUAL account holder.
    YOU as an individual might not agree to the "freeze" or the "handover"
    but it really won't be up to you -- and I guarantee you that your BANK or MUTUAL FUND, or even your STOCK TRADING FIRM **will** obey it, and will simply lock you out of those funds (on a "temporary" basis, until the new "rules" are put in place).And yes, that WILL cause another "crisis" of confidence, but it can simply be attributed to the "recession" and the "free market" and whoever ele they want to blame -- and you don't seriously think the government DISLIKES having another "emergency/crisis" do you? To them, an crisis just means "power grab opportunity" and allows them to push whatever they want through as new laws, etc. -- and "emergency" just means carte blanche to ignore the laws themselves.

    It's not like the public is really going to do anything about it. What are you gonna do? Hold [yet another] protest march? Drive out to the NYC headquarters of your Mutual Fund and DEMAND that they "unlock" your account at gunpoint? (A few people MIGHT try that... but they can be easily arrested and prosecuted as "homegrown terrorists" -- that's why they passed all that $#@! this past few years. Seriously, have you been asleep?)

    Most people will just go along with it all
    -- they're not called "sheeple" for no reason you know -- and believe that the government is SAVING their retirement funds (especially if there is some BS about "restoring" value lost in the 2008 crash).


    Welkome to the USSA -- otherwise known as AmeriKa.

  25. #22
    Quote Originally Posted by Met Income View Post
    Paying taxes and the 10% penalty? Not smart.
    Because taxes in the future will be OH so much LOWER than they are now...

    Riiight.

  26. #23
    Quote Originally Posted by ItsTime View Post
    They are going to crash the markets if they take away the tax incentives. Taking away those incentives would mean no more employer matching into your 401k.

    At least that is how I am understanding it.

    ummmm havent most of us here figured out by now that they are trying to crash the markets???

  27. #24
    Quote Originally Posted by Met Income View Post
    Why? This article doesn't refer to confiscation.

    Of course it doesn't. Because "confiscation" is one of those NOT-NICE words; people's 401K funds will never be "confiscated"... instead they will just be "rolled-over" into the new "Guaranteed Retirement Accounts" and people won't lose access to the funds (they'll still be able to look up a balance on a web page or a mailed statement) instead the control and "administration" of those funds will simply be "transferred" and placed under different "guiding regulations," that's all... "confiscated" BAH! Never happen!


    Just like the George W. Bush administration never "tortured" anyone -- they just used "enhanced interrogation techniques" in order to "solicit information" from people who were in "temporary custody."



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  29. #25
    Quote Originally Posted by WRellim View Post
    Because taxes in the future will be OH so much LOWER than they are now...

    Riiight.
    Precisely.

    The current rate plus the 10% penalty for early withdrawal today will look like the best investment you ever made vs the Obama increases in the capital gains tax (earnings from a 401k) and the income tax rates increases (levied as you withdraw) in the near future.

    Think about it. 401k cash is about the only asset left in this debt-ridden third world toilet. They're after it, and they'll get it.

    A GRA mandatory contribution is absolutely NO different from the Social Security mandatory contribution.

    This $#@! has some gall to even hint that the GS Pukes are better with investment of your forced savings after turning the Soc Sec trillions of surplus cash into a bucket of IOUs.

    Cash Out Now and buy something REAL with the money. Leave your 401k in the hands of the GS Pukes and I sure hope you like violin music when retirement time rolls around.

    Bosso

  30. #26
    Quote Originally Posted by danberkeley View Post
    Or the stocks in you retirement could tank.
    Then roll it over to something safer. Taking the 401 (k) is never in your best interest.

  31. #27
    so the calculation is 3.5% plus inflation? that's horse $#@!. what do they use for inflation the cpi. yeah most likely. which if you read any of schiff books, you'd realize is a sham.

  32. #28
    Quote Originally Posted by WRellim View Post
    Because taxes in the future will be OH so much LOWER than they are now...

    Riiight.
    Not the point.

  33. #29
    Quote Originally Posted by WRellim View Post
    Of course it doesn't. Because "confiscation" is one of those NOT-NICE words; people's 401K funds will never be "confiscated"... instead they will just be "rolled-over" into the new "Guaranteed Retirement Accounts" and people won't lose access to the funds (they'll still be able to look up a balance on a web page or a mailed statement) instead the control and "administration" of those funds will simply be "transferred" and placed under different "guiding regulations," that's all... "confiscated" BAH! Never happen!


    Just like the George W. Bush administration never "tortured" anyone -- they just used "enhanced interrogation techniques" in order to "solicit information" from people who were in "temporary custody."
    Nothing about the article says your existing 401K will be transferred to the gov't. It talks about future contributions.

  34. #30
    the only form of economic freedom is gold and silver. Rather than have an IRA that the government has records for, I'd rather buy silver coins from my local coin shops and stack. There are no $5000 limits. The government has no clue that you are stacking. There are no early withdrawal penalties. Oh yeah, and that whole currency debasement thing... I never trusted IRAs to begin with because I knew they would change the rules. They wanted you to park money so you couldn't touch it for 40 years. That's because they wanted it.

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