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Bye Bye 401Ks ect

Discussion in 'Uncategorized Threads' started by grunt, Nov 6, 2008.

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  1. grunt

    grunt TS Supporters TS Supporters

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    Today on the radio they were saying Congress wants to take over retirement 401s etc to pay us 3%. To make money to give to the under privileged. Hope all who voted for this fool get taken to the cleaners.. Dave Bishop
    If we haven't been hammered enough with losses to our 401k plans, now the democrat Congress wants to explore changes to these plans. They act like it's their money ($80 billion) in these plans and they are free to devise additional ways to get to it.

    “With respect to the 401(k), it appears to be a plan that is not really well-devised for the changes in the market,” Rep. George Miller, D-Calif., said.

    “We’ve invested $80 billion into subsidizing this activity,” he said, referring to tax breaks allowed for 401(k) contributions and savings.

    With savings rates going down,“what do we have to start to think about in Congress of whether or not we want to continue and invest that $80 billion for a policy that is not generating what we … say it should?” Mr. Miller said

    http://www.investmentnews.com/apps/pbcs.dll/a...

    Please wake up people. You were played by Barney Frank and Chris Dodd with Fannie and Freddie. You are being played by Barack Obama and his questionable history, and now Nancy Pelosi and Congress are going to play you too.
     
  2. BrowningGal

    BrowningGal TS Member

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    First, let me say that I'm a computer geek, not a financial geek. So, please, no disparaging remarks.

    I don't understand how this would work. My 401k is in an account in my name. It has tax benefits afforded by the government. I can see where they could change the tax benefits of the plan, but how could they "take over" my account? This makes no sense to me.
     
  3. DH

    DH TS Member

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    Well, let's see--pretty much along the line of what the Gov't is doing to private business now--The Banks, Wachovia in particular, sez Treasury Secy. Paulson, Wacohiva, you are in trouble, either be bought by CitiGroup (who gets $30 Bil from Govt, i.e., taxpayers)or we will shut you down. Wachovia will get $2 per share--few days later, Wells Fargo with no "Govt" help offers $7 share-Wachovia says yes-Citi says we may sue-however that would expose Govt role--Still with banks, Govt is trying to force small solvent banks to take part of Govt $ giving Govt ownership in banks that are not in trouble-these banks don't want this "Nationalism" of private industry.
    Our Govt has a long history of playing tax gamces on us-while I think they may somewhat of a constitutional issue in taking the 401(k), as many are totally privately funded by the holder. But Gov't has the power to tax, and thereby destroy-Sounds like we are planning on a bailout of the auto industry-I don't want my tax dollars doing that-nor do I like my tax dollars bailing out or "saving" insurance companies. This is the Gov't that basically forced the banks to make loans to people who could pay. And on it goes Comrade.
    Dave Hakola
     
  4. J.Woolsey

    J.Woolsey Member

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    I'm sure some one will correct me if I have recalled wrongly. I believe it was Argentina that siezed all private retirement accts. It can happen when you have a Commie dictator pulling the strings. J.W.
     
  5. DH

    DH TS Member

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    Recent article, in the Washington Post (I believe) indicated that the current president of Argentina was attempting to take the pensions-but there was a lot of opposition.
    Dave Hakola
     
  6. turmite

    turmite Member

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    Now I'm gonna ask a real stupid question. What would happen if everyone with 401k's cashed them in, took the loss now rather than later?

    Beat them to the punch!

    Mike
     
  7. J.Woolsey

    J.Woolsey Member

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    You would pay Tax on it, and if under age 59 1/2 an additional penalty of 10%. J.W.
     
  8. DH

    DH TS Member

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    Depending on your age, in addition to significant tax consequences, you will probably have penalties-but if you do-bury in someone elses yard so that the redistribution squads can't find it.
    Dave Hakola
     
  9. hoggy

    hoggy TS Member

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    On top of what is said above, most of us have lost so much with our 401k's cashing them in won't really help at this time. I have 8 months before I'm 59 1/2 and pray mine recovers by the time I am 59 1/2 and before Obama takes it over. This is not funny for us retired people with just barely enough saved up.
     
  10. spitter

    spitter Well-Known Member TS Supporters

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    Might be the time to convert to a Roth IRA?!

    Jay
     
  11. 22hornet

    22hornet Well-Known Member

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    Most of the big government loving, urban, social dependents that voted for obama wouldn't know a 401k plan from a jelly doughnut. All they know is "me, me, me...the government will take care of me. No more mortgage payment...no more worrying about paying for gas".
     
  12. dmarbell

    dmarbell Active Member

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    BrowningGal,

    Your 401(k) is not really in your name, but it is in an account with your name on it, sort of. It is held in a trust, for benefit of (FBO) BrowningGal. Under current law, you hold a measure of control over the trust - you can move it, direct investments, and under certain conditions actually terminate the trust and take the principle. Many legislators never considered this to be your money 100%. They have looked at various ways to confiscate it for a long time, without any measure of success so far.

    This discussion might give you an idea about why the government thinks they own a beneficial interest in your retirement plans - 401(k), IRA, profit sharing plan, 403(b), etc.

    If you are in a 30% tax bracket and contribute 5,000 to a plan, you "save" 1,500 in taxes, right? Actually, you only defer 1,500 in taxes. What goes in the plan are really 3,500 of your own money and 1,500 of taxes you would otherwise have had to pay. If you subsequently withdraw the 5,000 and are still in a 30% bracket, you would net 3,500 and pay 1,500 in taxes (ignoring the 10% penalty for early withdrawal for now).

    If you earn 8% on your plan, then your 3,500 grows at 8% and the government's deferred tax grows at 8%. To prove it, say the 5,000 grows, over time, to 20,000, a four-fold increase. In a 30% bracket, you would net 14,000 and the tax would be 6,000. Note that 4 times 3,500 is 14,000, and 4 times 1,500 is 6,000.

    Before Roth IRAs and 401(k)s were introduced, you could win the above game because your money in the plan (the 3,500 only) grew tax free. Your 3,500 grew tax free, and the tax money grew - for the government. You could also win the game if your tax bracket was lower when you withdrew the money than when you put it in. If your bracket was only 25% when you took the money out, then you would net 15,000 on the 20,000 balance - so 250 of the government's money had actually grown tax free for you (250 times 4 is the extra 1,000 you netted).

    The alternative has always been an investment or savings plan which did not grow without current taxes, except for limited return things like municipal bonds. Now there are Roth accounts, which have no deferred tax parts, and can grow tax free for you.

    Make no mistake about this: if you have money in a qualified plan, and your tax rates go up, part of your qualified plan just got confiscated.

    Danny
     
  13. cubancigar2000

    cubancigar2000 Well-Known Member

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    You cannot even take it out at 59 1/2 unless you quit or meet the reqwuirements. You can only borrow a portion of. A 401 K has not been the best investment for some years now. You can do better on your own. I took mine at 65 and 7 months and they made me wait until I actually had retired from the job, then took the taxes too. Do your research and invest your own
     
  14. timb99

    timb99 Well-Known Member

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    "You can do better on your own."

    I'd have a hard time beating the 50% match my company gives on the money I put in my 401k.
     
  15. halfmile

    halfmile Well-Known Member

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    My information is that significant withdrawals are allowed after 59 & 1/2 age.

    At this time you can also borrow against what you have in there, paying interest on the loan to the account. The interest is tax deferred also.

    So I guess you should borrow all the value, pay interest on it, and borrow again as soon as the interest is built up.

    That way the government will get a loan which you can default on. Just like the big boys do it.

    HM
     
  16. shooterIII

    shooterIII Member

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    Dave Ramsey on the Fox Business News channel said that a large number of companies that donate to your 401K will stop because of the economy and if your company is one of them, than roll your 401K into a Roth IRA because you than have control of your money.
     
  17. dmarbell

    dmarbell Active Member

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    HM

    "My information is that significant withdrawals are allowed after 59 & 1/2 age." Depends on how the plan is written. Some plans allow "in-service, non-hardship rollovers" of the vested employee contribution. Some do not.

    "So I guess you should borrow all the value, pay interest on it, and borrow again as soon as the interest is built up." In most plans, you can borrow up to 50% of the plan value, limited to the first $50k.

    Danny
     
  18. b12

    b12 Well-Known Member

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    Itgoes like this.
    I don't remember which adminstration this amendment was added and I don't remember word for word but it ends up this way.
    I AN EMERGENCY OF A ECONOMIC CRISIS THE FEDERAL GOVT. CAN SIEZE ALL ACCOUNTS OF ANY SAVINGS, 401'S AND ALL OTHER PRIVATE ACCOUNTS FOR THE BETTER OF OUR COUNTRY.

    Now what I do read in that is, if I am very wealthy and have the oppourtunity I will pull my money investments out of the markets and move them to a freindly country that likes my money and I don't have to pay taxes or penalties. The best part is I will not need to pay capital gains taxes either. I better hurry though cause I only have 30 days to do this. B12

    I think all this happened the first term of Slick Willie. And remember he would not lie to you. He said so to the nation when he pointed his finger at you.
     
  19. JB Logan Co. Ohio

    JB Logan Co. Ohio TS Member

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    If the monies that are put into a Roth IRA were previously tax deferred (qualified) you'll have to pay tax on it in the year you transfer or put it into a Roth. THEN it will be available to you at no tax. Interest income will be still be taxable when you remove it assuming that it is still in the Roth.

    JB=Jerry Beach 8503917
     
  20. Dove Commander

    Dove Commander TS Member

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    Would union retirement plans be subject to the same demise as 401K's? If not, it's selective taxing.
     
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