Thursday, October 23, 2008

Your 401(k) to Disappear?

Oh, yah.

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute

Quoted in Hot Air. Their analysis?

That means your employer can no longer write off their contributions to your 401(k), and your capital gains would be taxable year-on-year. In other words, it becomes just another investment or savings account, with no tax benefit at all, and no employer contribution. Instead, Uncle Sam would give you your “matching” funds — up to a whopping $600 per year! Whoopee!

And what do you get as "securities"?

They give you government bonds as your only investment option.

Think that's all? Maybe not. There's the Argentine option, too.

Argentina's leftist government has seemingly found a novel way to find the money to stay afloat: cracking open the piggybank of the nation's private pension system.

The government proposed to nationalize the private pensions, which would provide it with much of the cash it needs to meet debt payments and avoid a second default this decade.

--Powerline, quoting the WSJournal

So at about the time that your "Gummint Bonds" become payable to you, they may become "junk bonds," and then you'll be .....(unprintable word here.)


Disgruntled Car Salesman said...

This scares the daylights outta me.

Amy said...

Yeah...why should I bother putting away 10% when the government's just going to take it from me, anyway?

Anonymous said...

Somebody's gotta support Hank Paulson and all his pals, then the poor elderly, and don't forget the deadbeats.

Honesty doesn't seem to pay as well as it did in the past...


Headless Blogger said...

Cool! Finally an answer to "McCain is taking Granny's Social Security check away."

Given the two choices, I'll take my chances with my own lowsy investments.

It is October and the RNC is finally getting down & dirty. I cannot wait until next week's news on The One. I'll wager it gets especially personal.

Headless Blogger said...

Oh, and I did some math.

Forty years of contributing $5000 a year plus the $600 from the Feds, when invested at 3% will total about $425,000 in today's dollars. That assumes that the inflation adjustment keeps up with actual inflation, including food & fuel.

My kids and grandkids can forget about retiring, unless they get government jobs.

HeatherRadish said...

Having a 401(k) is racist.

So says Obama's friend Michael Pfleger. I've been looking for the video, but the one HotAir linked last spring has been pulled.