Its 10:00, do you know where your 401k is?

[blktoptrvl]

Originally Posted by noncom23

Is there any way to open you all
to the possibilties that you may
be missing something that that you
may not be aware of?

Personally, I don't get into all these Obama bashing conspiracy theories for two basic reasons. First I view him as a better than average President who has been doing good work for the US citizens. I think that if people could take off their political and racial blinders they would probably see it too. But I know that is not possible so I try to avoid most debates about him, and that leads me to the second reason... Almost everything the President does is some kind of dog whistle to all those who hate him.

There have been so many nonsense warning about the President's agenda that for me, all I have to do is hear/read a little of them and I know they are garbage. They just don't pass the common sense test.

Here is Mother Jones' take on this 401K conspiracy...

A New Obama Conspiracy: He's Confiscating Your IRAs | Mother Jones

And here is a chart that I would think is funny if it weren't so sad...

[Quicksilver]

I don't know what's behind the time wasting distortions that people promote but everyone is allowed believe what gives them comfort. Unfortunately perception isn't always reality. Joes say's this, Mary said that and what we are left with is picking apart conroversy, trying to find truth, when in fact at the time like beauty truth about this subject is in the eye of the beholder. I find much of this notion humerious and entertaining so let me stir the pot by contributing some additional perspective......

Doocy, Gingrich falsely accuse Obama of a "scheme" to seize 401(k) assets | Research | Media Matters for America

[noncom23]

Amid Tax Talks, a Cry of 'Save My 401(k)!'
Reuters | November 27, 2012 | 07:45 AM EST
As the debate around tax reform grows more heated, broker-dealers and other companies that service retirement plans offered by employers are increasingly concerned that the tax benefits of 401(k) plans are on the chopping block.

An industry group that normally works behind the scenes, the American Society of Pension Professionals and Actuaries, on Monday launched a media campaign intended to educate U.S. employers and workers that the federal government might consider changing the tax benefits of retirement savings accounts.

That worries the ASPPA because Americans might end up saving less, and some smaller employers might eventually decide to discontinue their own 401(k) plans.

The "Save My 401(k)" campaign includes a website, Facebook page, Twitter feed, and even an online videogame. The budget is undisclosed but is in the six figures, according to the ASPPA's chief executive, Brian Graff.

The goal of the media campaign, said Graff, is to raise awareness among employers and employees that they may be in danger of losing some of the tax breaks surrounding their 401(k) plans.

The ASPPA has 11,000 member companies including broker-dealers and record keepers who service the retirement savings plans offered by U.S. employers.

In the wake of the November U.S. elections, the federal government is mulling a possible increase in taxes as a means of reducing the federal budget deficit.

A full-scale tax reform could cut or limit specific tax breaks as a way of lowering overall tax rates. President Barack Obama has said he will raise taxes for wealthy Americans, and trade groups representing both employers and financial services firms have voiced concerns that the tax benefits of 401(k) plans could be slashed.

"The last time Congress made major changes to the tax code, there was a drop in 401(k) contributions by more than 70 percent," Graff said in an interview.

Under the current system, investors who place money in their 401(k) plans do so on a tax-deferred basis, which means they pay no taxes on that money until they withdraw it from the plan.

At present, employees are allowed to put $17,000 a year into their 401(k) plans. In 2013, that amount is scheduled to increase to $17,500.

ASPPA officials have been in talks with members of Congress about their concerns, but the industry group believes it should now reach out to investors, given the importance of the situation, Graff said.

"Everyone we met with said we had a great story, but they said they had to hear from the constituents."

Through the "Save My 401(k)" campaign, ASPPA members - including large brokerage firms such as UBS, Bank of America Merrill Lynch and LPL Financial - intend to reach out to clients and encourage them to write letters to Congress.

[noncom23]

SAN FRANCISCO (MarketWatch)—As the fiscal-cliff debate staggers on, some in the retirement industry have come out swinging against the possibility of lawmakers slashing tax benefits for 401(k)s and similar retirement plans. But do 401(k)s need protection? That is, are lawmakers really gunning for the billions of dollars of uncollected tax revenue sitting in retirement plans?

The answer is a qualified maybe.

Some say it’s inevitable lawmakers will at least look at limiting the tax benefits of such plans. After all, tax deferral for 401(k)-type plans will cost the government an estimated $429 billion from 2013 through 2017. (There are many ways to estimate the total amount of lost revenue. The figure above is from the fiscal year 2013 federal budget. See that budget report here .

This paper from Boston College’s Center for Retirement Research looks at various ways for estimating the cost.

Click to Play

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“The numbers are big enough that I think [lawmakers] will evaluate whether the tax preferences given to these plans are worthwhile,” said Craig Rosenthal, a partner with Mercer, a human-resources consulting firm, in New York.

Few expect Congress to start tinkering with retirement-plan tax breaks between now and the end of the year. That hasn’t stopped the American Society of Pension Professionals and Actuaries, a trade group, from developing a media campaign, complete with website, Facebook page, and Twitter handle, to encourage retirement savers to contact their members of Congress to forestall any such changes.

The industry is worried that revenue-seeking lawmakers may slash the 401(k) maximum contribution amount. Various deficit-trimming proposals in recent years suggest that very idea, not least the Simpson-Bowles plan of 2010, which proposed limiting the total annual contribution from employee and employer combined to the lowest of 20% of salary, or $20,000. The current annual maximum for employer and worker contributions is about $51,000. Read the 2010 Simpson-Bowles report here.

Long-term outlook

Still, it’s unlikely 401(k) changes will get adopted soon. “I do not expect any change as part of the current [fiscal cliff] negotiations,” said Dallas Salisbury, chief executive of the Employee Benefit Research Institute, a nonprofit think tank.

But in 2013 or 2014, “tax expenditures” (that is, the money the government doesn’t collect due to tax breaks) will be on the table, Salisbury said. “Should the parties take the approach that both have discussed—that is, a dollar limit on itemized deductions or a maximum tax rate applied to deductions—then retirement incentives will likely be left where they are, or very close to it,” Salisbury said.

But if broad tax reform is taken off the table, he said, look for lawmakers to raise revenue by trimming the maximum-contribution amount and other means, with an effective date of 2014 at the earliest.

Others agreed. With regard to trimming 401(k) tax breaks, “There’s nothing that the tax-writing committees or anybody who has real influence is really pushing at this stage,” said Eric Toder, co-director of the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute.

Even if lawmakers eventually do limit the 401(k) maximum contribution amount, that’s not likely to change savings rates, Toder said. “There are very few people who contribute to the contribution maximum.”

Shifting the tax break

Generally, only high-income workers can afford to save the maximum, and the tax benefits of 401(k)s accrue largely to those folks. Read: Who gains most from 401(k) tax breaks?

[JCL]

So this thread started with the government nationalizing 401k accounts and forcing all citizens to contribute, and now none of that is true, but they might reduce the tax break in upcoming years for those who contribute? Isn't that what they are supposed to do, balance the budget by way of tax changes and expenditure changes?

[noncom23]

Originally Posted by JCL

So this thread started with the government nationalizing 401k accounts and forcing all citizens to contribute, and now none of that is true, but they might reduce the tax break in upcoming years for those who contribute? Isn't that what they are supposed to do, balance the budget by way of tax changes and expenditure changes?

I give, you win. Yes government
should increase taxes on our savings
so they will have more to waste.
Sounds good. Works everywhere
else, right? And that won't lead
to anything negative, or more taxation.
They'll just do it once.

[noncom23]

Yep, I am wrong again.
Another unreliable source.


IBD Editorials Thats Investors Bus. Daily.
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Does Government Want To Drain Americans' 401(k) Plan?

Posted 11/28/2012 06:39 PM ET
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War On Wealth: As Washington debates what to do about the fiscal cliff that it foolishly created, many potential sources of new revenue will be thrown on the table. One of them is likely to be 401(k) plans.

Retirement is an American's reasonable expectation. We put money into investment plans so that our work today funds our hard-earned leisure of tomorrow.

But many in Washington see our investment accounts not as the expressions of well-planned, disciplined decisions but as untapped reservoirs of wealth they can drain to fix the problems that they caused.

The tax protection that 401(k)s have now can be wiped out by grasping politicians who refuse to do what's right, which is to severely cut spending.

The war on retirement, particularly 401(k)s, is quiet now. But that's because it's a cold war.

And like the postwar tensions between the East and West, it could erupt at any time into a hot war.

One group of retirement plan professionals is warning that the hostilities might be closer than many of us think. The American Society of Pension Professionals and Actuaries launched on Monday, according to Reuters, "a media campaign intended to educate U.S. employers and workers that the federal government might consider changing the tax benefits of retirement savings accounts."

A website set up by the ASPPA advises account holders to tell lawmakers to "keep their hands off your retirement savings" and explains that "Congress needs to reduce the deficit, and part of deficit reduction will most likely be 'tax reform' that increases tax revenue" — the strong suggestion being that Washington is coming after Americans' 401(k)s.

If the ASPPA were alone in issuing its warnings, it could be written off as the hyperbole of an isolated group. But Washington's lust for Americans' retirement investments is well documented.

President Obama's National Commission on Fiscal Responsibility and Reform, for instance, proposed lowering the cap on the amount workers could place in their 401(k)s without incurring taxes.

And nearly three years ago, Newt Gingrich and Peter Ferrara wrote on these pages about the Treasury and Labor departments "asking for public comment on 'the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams.'"

"In plain English," said Gingrich and Ferrara, "the idea is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years."



Read More At IBD: Does Government Want To Drain Americans' 401(k) Retirement Plans? - Investors.com

[noncom23]

Why and how it is to be done.
Time Magazine, also a worthless
source...


Fiscal Cliff: Why Congress Might Have to Mess with the 401(k)
By Dan Kadlec
Nov. 28, 2012122 Comments
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JIM LO SCALZO / EPA
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.

To maintain this savings incentive the government “spends” $100 billion a year in the form of tax breaks to those who stash money in these kinds of accounts. Now, a new study suggests this tax incentive does little to change saving behavior. Some lawmakers, no doubt, are wondering: Why keep an expensive tax incentive that does not incent?

(MORE: Why the Fiscal Cliff Is the Wrong Thing to Worry About)

The study, reported in The New York Times, comes from Raj Chetty and John N. Friedman of Harvard, Soren Leth-Petersen and Tore Olsen of the University of Copenhagen, and Torben Heien Nielsen of the Danish National Center for Social Research. It looked at data from Denmark, where the pension system is similar to that in the U.S., and found that every dollar that government spent on tax breaks increased total savings by about one penny.

That’s not much of a payoff. Meanwhile, the Tax Policy Center in Washington has found that about 80% of retirement savings benefits flow to the top 20% of earners. Eliminating the deduction for retirement savings would hit the well-off disproportionately, a condition with a lot of appeal in the current political climate.

Trying to head off this line of thinking, the American Society of Pension Professionals & Actuaries recently launched a save-my-401(k) campaign, encouraging workers to email their representatives in congress. The group notes that having a 401(k) plan is the single most important factor in determining if a worker is saving for retirement and that families with a retirement savings account, on average, have two-thirds of their assets in that account.

Yet the Danish study suggests that little would change if the tax incentives were removed. Only 15% of savers actively respond to tax incentives, the study found. Far more important are features like automatic enrollment and contribution rates that automatically increase with pay raises.

(MORE: Wall Street’s Bet on the Fiscal Cliff)

So hold on to your wallet. Congress has many options when it comes to tapping this vast reservoir. It could eliminate the deduction altogether or just for top earners, further restrict the amount that is deductible (currently $17,500; for those over 50, $23,000), start taxing retirement savings growth, or take back the part that has grown tax-free.

In the throes of a retirement savings crisis, none of these options is appealing. But that last one is most troublesome. At stake is any savings that has accrued tax-free in a Roth IRA. Tax-deferred growth could be a target too if you find yourself in a lower tax bracket in retirement. There is no discernible momentum behind such measures. But a retroactive tax on this sheltered income has been a worry from the start. And now these accounts have a meaningful total—and everything is on the table.


Dan Kadlec @dankadlec
Dan Kadlec is a journalist who has written about personal finance for TIME and other outlets for 25 years. He is the author of three books, a leading voice in the global financial literacy movement, and strategic adviser to the National Financial Educators Council.

[Quicksilver]

Your title say's "Why and how "it is" to be done." Emphasis on "It Is"..
The article title is "Why Congress "Might" Have to Mess with the 401(k)"
Emphasis on the word "Might". The word might doesn't mean will.

I can write an article about what "MIGHT" happen and for me that would
be my reality but in real practice JIM LO SCALZO / EPA opinion isn't
any better than someone else that disagrees with him.

[JCL]

Noncom: I think we are talking past each other. There is nothing wrong with your last two links. And I am not suggesting governments should raise taxes, but rather that they should balance budgets by a combination of revenue increase and spending reduction. I don't really mind what the mix of the two is, but I think it should be both, to some degree. If there wasn't a debt problem, then reducing spending would reduce the deficit, but given the current debt, there is a huge percentage of spending that is not discretionary, so there will have to be some revenue increases, IMO. You don't get out of a hole just by stopping digging, although it is a good start. You have to actually start filling the hole back in, and pay down the debt.

What my last post above actually said, wasn't "don't reduce spending." It just pointed out that this thread has shifted a lot from forced participation, Communism, nationalization of private accounts, etc, all the way to "they might change the contribution limit or remove the tax break for contributing" (while not touching what is already invested). That is quite a shift in objectives.

For the record, I think people should be encouraged to save for retirement. Trouble is, they aren't responding to the incentives being offered, as your post noted. I max out my RRSP (our 401k equivalent in Canada) every year. But only one third of eligible citizens in Canada make any contribution, and the average across those is only 5% of income, well below the limit. So those tax credits we have, very similar to the US ones, don't seem to be very effective in driving the desired behaviour.

So, what is the alternative? Tax policy Shold be designed to drive behaviour, not just to hand out gifts. What else may work better? What would you do?