Pirates! Man Your Women! » Blog Archive » Guess Who is Eyeing Your 401K?

Guess Who is Eyeing Your 401K?

in the late afternoon on Friday, the 24th of October 2008 by Katie

The U.S. House of Representatives.

And no, this is not a Halloween scare. This is real.

Earlier this month, the House held a hearing.

Excerpts from an article titled: “House Democrats Contemplate Abolishing 401(k) Tax Breaks”:

“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.

“….looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.”

“Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
“I want to stop the federal subsidy of 401(k)s,” Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”

Is this what you want? Do you want the government to control your 401K? Do you really think that the government could do better than the private sector? (remember, the government also brought you social security, Medicare, and the DMV).

Click here for an article on this subject by U.S. News.

Is this part of “spreading the wealth around”? Do you really trust Nancy Pelosi and crew with your only retirement savings.

They are talking about mandatory, retirement savings. All of the money would be held by the government. And, you would get a set amount back, for the rest of YOUR life. I emphasis YOUR life, because that is another thing to keep in mind. 401K’s are yours. If you die, before you plunder your 401K, the money goes to your heirs. But, in the new, government run plan, the benefit would die when you die. So, if you should happen to pass away before your reap your benefits, that money goes to the government, not your heirs.

And think about this – what they are describing is basically how the Social Security system (the very thing that is failing now) was supposed to operate. So, if the politicians could not keep their hands out of the Social Security “kitty” then, why should we believe that they would keep their hands off now?

It all comes down to this. Do you really trust the politicians in Washington with your entire retirement savings?