Your Retirement Account Looks Delicious

 

Here’s one way to solve the national debt problem: re-write the rules governing private retirement plans like the 401k.

They’re thinking about it. From the Washington Times:

The $19.4 trillion sitting in personal retirement accounts like the 401K may be too tempting an apple for a government that is quite broke, both monetarily and morally. The U.S. Consumer Financial Protection Bureau director Richard Cordray recently mentioned these accounts in a recent interview, stating “That’s one of the things we’ve been exploring and are interested in, in terms of whether and what authority we have.”

This is how they’re going to proceed: with bureaucratic regulations and rule-writing. They won’t take the money, of course. They’d just regulate it for safety:

If the government takes control of retirement accounts, it will not be called “nationalization.” There will most likely be an indecipherable document that provides an opt-out option (initially), but why would you want to do that? The US government only wants to ensure the safety of your retirement funds; they did after all create a new bureaucracy for that specific purpose. And what could be a safer investment than US bonds?

It would go like this: the government is going to protect you from yourself and your bad investments by forcing you to invest your retirement money in the brokest nation in history. In return, the government will take your cash and pay down the national debt, free up some extra money for “investments” in whatever it is that Barack Obama wants to invest in (with your retirement money) and wrap it all up in guise of “protecting” the consumer from scams.

Although a bigger, more dishonest, more predatory scam than this simply cannot be imagined.

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Members have made 36 comments.

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  1. Profile photo of WI Con Member

    There’s been alot of talk on the right about event would produce that ‘spark’ for a major show-down/shake-up.

    This sure looks like one to me. God help us all is these fools actually try this.

    • #1
    • February 4, 2013 at 10:34 am
  2. Profile photo of C. U. Douglas Thatcher

    I’ve been watching reporsts such as these like a hawk. I’ve not a lot in retirement, but I still would rather take the hit in penalties and taxes rather than suffer a government theft of my hard-earned retirement.

    Just sayin’.

    • #2
    • February 4, 2013 at 10:35 am
  3. Profile photo of Valiuth Member
    C. U. Douglas: I’ve been watching reporsts such as these like a hawk. I’ve not a lot in retirement, but I still would rather take the hit in penalties and taxes rather than suffer a government theft of my hard-earned retirement.

    Just sayin’. · 0 minutes ago

    Oh you may suffer the penalties and still have your money taken into the safe keeping of the government. After all it’s not like you are doing anything with it. 

    • #3
    • February 4, 2013 at 10:42 am
  4. Profile photo of Tran Quil Inactive
    C. U. Douglas: .. I still would rather take the hit in penalties and taxes rather than suffer a government theft of my hard-earned retirement.

    Just sayin’. · 7 minutes ago

    Ditto.

    • #4
    • February 4, 2013 at 10:44 am
  5. Profile photo of Shane McGuire Member

    This should be preceded by a regulation requiring 401ks to be offered by any employer with more than 20 employees, and a regulation requiring the matching of any funds up to 5% of income deposited into such accounts.

    18 months later, there is a crash in the stock market. Perhaps due to disruption of oil supplies in Iran or Iraq.

    Big Oil execs with Anglo surnames will be frog-marched to Washington to explain this hiccup in the economy.

    Then a terrorist attack causes more stock tankage.

    Then, the government, no longer able to ignore the crisis, uses the takings clause to take all 401ks, and the just compensation is a guaranteed crappy standard of living in retirement.

    Or, if that last part’s too farfetched, there will be a mandate that all 401k accounts be given to the government, and if the holder of the account refuses, he is taxed an amount equal to 120% of the account, to be paid out over 3 years. No promise for just compensation necessary. It’s a tax!

    • #5
    • February 4, 2013 at 10:49 am
  6. Profile photo of smp16 Inactive

    As a young professional, I have very little in my 401k. I was considering adding more until I started to hear these rumblings. Now I’m not so sure.

    • #6
    • February 4, 2013 at 10:53 am
  7. Profile photo of Barkha Herman Member

    Cradle to grave, baby!

    • #7
    • February 4, 2013 at 10:53 am
  8. Profile photo of mask Inactive

    I’m not worried. The government has done a great job managing social security. /sarcasm

    Any avid reader of Thomas Sowell already knows that the government has already attacked your retirement investments: inflationary policies.

    • #8
    • February 4, 2013 at 10:56 am
  9. Profile photo of Astonishing Inactive

    No problem. I’ll just cash out my 401k, change my name to Julia Hernandez, renounce my US citizenship, apply for amnesty, and sign up for Obamacare.

    • #9
    • February 4, 2013 at 11:04 am
  10. Profile photo of C. U. Douglas Thatcher
    Valiuth
    C. U. Douglas: I’ve been watching reporsts such as these like a hawk. I’ve not a lot in retirement, but I still would rather take the hit in penalties and taxes rather than suffer a government theft of my hard-earned retirement.

    Just sayin’. · 0 minutes ago

    Oh you may suffer the penalties and still have your money taken into the safe keeping of the government. After all it’s not like you are doing anything with it. · 22 minutes ago

    Aye, there’s the rub …

    • #10
    • February 4, 2013 at 11:06 am
  11. Profile photo of HeartofAmerica Member

    Maybe I should go ahead and take retirement and then roll my meager 401K into something safe like a shoe box under the bed.

    Just as a point of education for myself…what type of savings/401K do members of Congress and government employees have? I ask because I want to ensure that their funds are used first.

    • #11
    • February 4, 2013 at 11:06 am
  12. Profile photo of Vance Richards Member

    Since much of the money in 401k’s is currently invested in stocks and stock funds, taking the bulk of that money out would cause a huge drop in stock prices. So, opting out might not be much of an option either. Please tell me is another conspiracy theory post.

    • #12
    • February 4, 2013 at 11:08 am
  13. Profile photo of Bob Laing Member

    I don’t want to sound like a “hoard guns and gold” reactionary, but having some assets off the grid is a prudent maneuver. Precious metals are, arguably, a better store of purchasing power than any other asset on the planet and, as an added bonus, capital gains taxes are harder to collect when you sell physical metals to vendors.

    • #13
    • February 4, 2013 at 11:14 am
  14. Profile photo of Paul A. Rahe Contributor

    Back before 2008, when W. was President and the Democrats held the House, Nancy Pelosi’s minions held hearings about confiscating our 401k’s.

    • #15
    • February 4, 2013 at 11:39 am
  15. Profile photo of KayBee Inactive

    I’m wondering if the money I have in my IRA would fit inside my mattress (along with my guns and high-capacity magazines). I’m sure the federal government would be happy to advise me on the matter. Except that I’d probably go to jail because I removed my mattress tag.

     tag.jpg

    • #16
    • February 4, 2013 at 11:42 am
  16. Profile photo of Kozak Member

    This, and gun confiscation are my lines in the sand.Also everyone should investigate the option of a self directed IRA. This puts the money in YOUR hands. Make THEM come and get it when the time comes.

    • #17
    • February 4, 2013 at 11:43 am
  17. Profile photo of Casey Taylor Member
    HeartofAmerica: Maybe I should go ahead and take retirement and then roll my meager 401K into something safe like a shoe box under the bed.

    Just as a point of education for myself…what type of savings/401K do members of Congress and government employees have? I ask because I want to ensure that their funds are used first. · 43 minutes ago

    Edited 41 minutes ago

    They utilize the Federal Thrift Savings Plan.

    Seriously, that’s the name of it.

    • #18
    • February 4, 2013 at 11:55 am
  18. Profile photo of Kevin Inactive

    If they’re talking about 401ks, then IRA’s can’t be that far behind. ‘Specially when the feds “unexpectedly” end up w/ less money than they were expecting from the 401ks.

    Damn, it’s stories like this that push me more toward moving back to TX and investing in gold, lead and tin.

    • #19
    • February 5, 2013 at 1:01 am
  19. Profile photo of Bob Laing Member
    Western Chauvinist
    Robert: I don’t want to sound like a “hoard guns and gold” reactionary, but having some assets off the grid is a prudent maneuver. Precious metals are, arguably, a better store of purchasing power than any other asset on the planet and, as an added bonus, capital gains taxes are harder to collect when you sell physical metals to vendors. 

    You can’t eat or shoot gold. As my brother’s tag line goes, Buy More Guns and Ammo (BMGAA). Bullets can be used in a currency exchange, either in the active or passive form. · 15 minutes ago

    I don’t disagree with you at all. The guns and ammo are very good things to keep in ample supply. The precious metals are just slightly easier to liquidate in the event we don’t end up in a dystopian future. 

    • #20
    • February 5, 2013 at 1:04 am
  20. Profile photo of iWe Member
    iWe
    Kozak: Also everyone should investigate the option of a self directed IRA. This puts the money in YOUR hands. Make THEM come and get it when the time comes. · 25 minutes ago

    I know dozens of people who do this – and invest the funds in assets the government cannot seize. It is a very solid option.

    • #21
    • February 5, 2013 at 1:11 am
  21. Profile photo of PsychLynne Member

    Way back in the early 90s, when I was in my first round of graduate school, I had a classmate who was a former actuary. He was not a firebrand, activist, conspiracy type at all. He advised me back then not to put more than the minimum in an IRA for this very reason. He was convinced in the 40 years before we retired this would happen. Suppose I’ll be looking into self-directed IRAs now….

    • #22
    • February 5, 2013 at 2:30 am
  22. Profile photo of John Walker Contributor

    Private pension fund nationalisation has already happened in Argentina in 2008. (I have been saying since 2009 that Obama was not the new Jimmy Carter, but “the American Perón”.) Hungary seized private pension accounts in 2010. Bulgaria, Ireland, Poland, and France are going down this road.

    Anybody with substantial retirement savings should seriously consider getting them out of restricted accounts, out of their country of domicile, and out of the banking system. I did this in 1994, but then I’m always too early.

    Better two decades too early than one day too late.

    • #23
    • February 5, 2013 at 2:49 am
  23. Profile photo of Jim Ixtian Inactive
    C. U. Douglas Because the President will say it’s all for fairness. It’s not fair that the Very Wealthy have these comprehensive retirement plans that We the People don’t have. Then MSNBC and CNN’s talking heads will nod sagely and excoriate those of us who oppose the President because our retirement plans can’t be all that great if we’re not wealthy and thus we are better off with the government in charge don’t you see …

    Add to that chorus the Left-wing organizations agitating for this outcome like the Pension Rights Center and Retirement USA.

    As Messr. Walker pointed out, Argentina here we come…

    • #24
    • February 5, 2013 at 3:52 am
  24. Profile photo of Duane Oyen Member

    This is just another opinion piece by a schlub just like you and me, except that he published in the Times blog. Ever since Argentina expropriated its citizens’ retirement savings, the Paranoid Right has been tossing this possibility out- including at least two Ricochet threads I recall.

    Does anyone seriously think that the trial lawyers and college professors- all of whose retirement savings are in 401(k)s, would put up with this nonsense?

    Sure, Obama would love this. He’d love to ban guns, eliminate the Pentagon, and extend Medicare single-payer to the entire population too.

    Won’t happen in our lifetime.

    • #25
    • February 5, 2013 at 5:08 am
  25. Profile photo of raycon and lindacon Member

    “Although a bigger, more dishonest, more predatory scam than this simply cannot be imagined.”

    Social Security.

    • #26
    • February 5, 2013 at 8:23 am
  26. Profile photo of John Hanson Thatcher

    It won’t quite be a “taking”. I suspect they will just eliminate tax favorable treatment for any investment other than US Treasuries, then offer to convert your present portfolio to treasuries, and maybe give you a premium of 3% to sweeten the pot, then “guarantee” say a 3% rate of return (fixed indefinitely), use all the money so dontated to them, and continue to inflate the economy, say at a rate of 4% per year, thus inflating what ever you had at a rate of at least 1% a year. By the time you retire, the face amount might be a million dollars, but it would buy a macaroni and cheese dinner once, maybe

    • #27
    • February 5, 2013 at 8:39 am
  27. Profile photo of Margaret Sarah Inactive

    The college professors don’t have their savings in 401Ks. As for the trial lawyers, they are always able to beat the system.

    What I worry is that the government will use both the carrot and the stick to move retirement funds over to US bonds–taking away the tax advantage of the IRA and 401K unless they are invested that way, and giving (or promising) a special bond interest rate (to be paid for in taxes by those who did not move their funds in accordance with the government plan.

    Just a nudge to make people do what’s best for them. And for the government.

    • #28
    • February 5, 2013 at 9:16 am
  28. Profile photo of Miffed White Male Member
    Western Chauvinist

    You can’t eat or shoot gold. As my brother’s tag line goes, Buy More Guns and Ammo (BMGAA). Bullets can be used in a currency exchange, either in the active or passive form. · 8 hours ago

    I think your sentence got cut off. Obviously what you meant to type was “Buy More Guns and Ammo Than The Guy Next Door Who’s Buying Gold Instead of Guns and Ammo.” BMGAATTGNDWBGIGA.

    • #29
    • February 5, 2013 at 9:36 am
  29. Profile photo of Fred Cole Member
    Rob Long: 

    Although a bigger, more dishonest, more predatory scam than this simply cannot be imagined. 

    Well said.

    And the tragedy is that when its sold to them, the People, in their infinite wisdom, will favor it.

    • #30
    • February 5, 2013 at 12:02 pm
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