Amid Tax Talks, a Cry of 'Save My 401(k)!'

Amid Tax Talks, a Cry of 'Save My 401(k)!' - US Business News - CNBC

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.

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Anyone else read anything about this?

American said:

Anyone else read anything about this?

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I've been reading about stuff like this for years but I really don't see any changes on the horizon. What might happen is that all qualified plans will be forced to have a floor percentage invested in treasuries and I could see something like that happening in the next 4 years.

No, but as a matter of parity, I think that employer contributions to employee healthcare and 401(k)s should be taxable on the employee as income if we go down the road of trying to sock it to the wealthy.

Aren't 401Ks (never had one - real question) just like IRAs in that they are tax DEFERRED, not tax exempt. If rates are rising, the draws will pay the higher rates. If I'm wrong, please explain. Thank you.

Fisher said:

No, but as a matter of parity, I think that employer contributions to employee healthcare and 401(k)s should be taxable on the employee as income if we go down the road of trying to sock it to the wealthy.

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15 Things the GOP Doesn't Want You to Know About Taxes and the Debt | Crooks and Liars

So, as the Republicans make Mitt Romney their official nominee for President of the United States, here are 15 things the GOP doesn't you to know about taxes and the debt.

(Click a link to jump to the details for each below):

President Obama Cut Taxes for Almost All Working Americans
Ronald Reagan Tripled the National Debt
George W. Bush Doubled the National Debt
Reagan Raised Debt Ceiling 17 Times, Bush Seven
Tax Cuts Don't Pay for Themselves
Almost All Working Americans Pay Taxes
The GOP's "Job Creators" Don't Create Jobs
Low Capital Gains Taxes Fuel Income Inequality...
...But Not Investment
The Estate Tax Has Virtually No Impact on Family Farms and Businesses
Income Inequality Has Reached an 80 Year High...
...While the Federal Tax Burden Has Hit a 60 Year Low
Romney-Ryan Plan Another Massive Tax Cut Windfall for the Wealthy
Romney, Ryan Won't Say Which of the $1 Trillion in Tax Breaks GOP Will End
Romney-Ryan Will Add More Debt Than President Obama


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specklebang said:

Aren't 401Ks (never had one - real question) just like IRAs in that they are tax DEFERRED, not tax exempt. If rates are rising, the draws will pay the higher rates. If I'm wrong, please explain. Thank you.

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They are tax deferred until you are retirement age at which point you will be presumably be paying a lower rate since you will no longer be working. If capital gains by the employer are going to be taxed at regular income rates, then so should the amount they are contributing as non-wage income to the employee.

Fisher said:

No, but as a matter of parity, I think that employer contributions to employee healthcare and 401(k)s should be taxable on the employee as income if we go down the road of trying to sock it to the wealthy.

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"sock it to the wealthy"?

http://www.nytimes.com/2012/10/17/business/economy/income-inequality-may-take-toll-on-growth.html?pagewanted=all

. . .

Thus, inequality might help explain the recession and the sluggish recovery after it. But now, economists and policy experts are facing the thorny and politically freighted question of what the United States’ inequality might mean over the next several years.

The recession seems to have cemented the country’s income and wealth inequality, not reversed it. The top 10 percent earn a larger share of overall income than they have since the 1930s. The earnings of the top 1 percent took a knock during the recession, but have bounced back. In contrast, the average working family’s income has continued to decline through the anemic recovery.

The distribution of wealth has become more concentrated as well. The lower income a family earns, the more wealth they tend to hold in their housing. Housing values have plummeted, and are not expected to recover for years if not decades. At the same time, many bond prices have soared and stock prices have performed well, aiding the upper-income households that tend to hold investments.

A new study by the left-of-center Economic Policy Institute, a research group in Washington, has found that the top 1 percent of households now hold a larger share of overall wealth than the bottom 90 percent does.

. . .

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Stop listening to FOX. They've admitted they control the republcian party and nothing more.

Fisher said:

They are tax deferred until you are retirement age at which point you will be presumably be paying a lower rate since you will no longer be working. If capital gains by the employer are going to be taxed at regular income rates, then so should the amount they are contributing as non-wage income to the employee.

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Not at all. Capital gains tax is almost non-existent and Ryan wants to eliminate it all. So, let's not tax the retiree whose paltry income pales in comparison.

specklebang said:

Aren't 401Ks (never had one - real question) just like IRAs in that they are tax DEFERRED, not tax exempt. If rates are rising, the draws will pay the higher rates. If I'm wrong, please explain. Thank you.

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You're correct. The government isn't going to require a certain % of them be put into treasuries. They may talk the game -- although I haven't heard anything about that -- but if that happens? It's an indication that we're on the verge of complete collapse. I can't even imagine a legal mechanism that could make that happen.

The idea behind making them tax-deferred is that, when one is retired, one is generally earning less and, thus, is in a lesser tax bracket. Plus, that tax-deferred money becomes the last money people use, so they can postpone taxes and watch it grow tax deferred . . . almost indefinitely depending upon their particular situation.

MaggieD said:

You're correct. The government isn't going to require a certain % of them be put into treasuries. They may talk the game -- although I haven't heard anything about that -- but if that happens? It's an indication that we're on the verge of complete collapse. I can't even imagine a legal mechanism that could make that happen.

The idea behind making them tax-deferred is that, when one is retired, one is generally earning less and, thus, is in a lesser tax bracket. Plus, that tax-deferred money becomes the last money people use, so they can postpone taxes and watch it grow tax deferred . . . almost indefinitely depending upon their particular situation.

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401Ks get played on the market like all others except Social Security. There is NO guarantee you will have anything when you retire.

401k Advice That Everyone Could Use

. . .

Due to the 2008 economic crisis and subsequent stock market decline, many 401k investors lost their shirts because they were not properly diversified. Unfortunately, most of these individuals had 100% of their money allocated to stocks even though they had 10 years or less until retirement. As a result of their losses, many of these people are now forced to postpone their retirement, or perhaps not retire at all. This is a classic example of why that, as you move closer to retirement, the return "of" your money is more important than the return "on" your money.
Only Invest in Index Funds


Read more: 401k Advice That Everyone Could Use


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Muddy Creek said:

15 Things the GOP Doesn't Want You to Know About Taxes and the Debt | Crooks and Liars

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President Obama Cut Taxes for Almost All Working Americans.......were by with the republicans in DEC 2010 cutting the SS rate?..democrats have no cut INCOME tax rates since JFK
Ronald Reagan Tripled the National Debt....during the Reagan era, treasury revenues almost doubled, where is the money, government spend it.....all appropriations take place in the house, democratically controlled them for 40 years 1952 to 1992
George W. Bush Doubled the National Debt.......very true, under the republican leadership the government spent like crazy , their largest deficit was 600 billion.
Reagan Raised Debt Ceiling 17 Times, Bush Seven.....true with the support of congress! democrats and republicans.
Tax Cuts Don't Pay for Themselves..........their is nothing to pay, the money belongs to the people who earn it...not government.
Almost All Working Americans Pay Taxes......yes, because their are taxes on everything, but everybody does not pay federal income taxes.
The GOP's "Job Creators" Don't Create Jobs........true, because the GOP OR DNC don't...........government does not create jobs, the private sector does.
Low Capital Gains Taxes Fuel Income Inequity<-------............what is inequality, hes got more than me.....wealth is not based on fairness, because fairness is subjective, it open to interpretation of anybody.
...But Not Investment
The Estate Tax Has Virtually No Impact on Family Farms and Businesses.......really, i can own 800 acres, and equipment cows and a house on it worth more than a million, but i am not cash rich i am property rich, take my property and you destroy my farm and family.
Income Inequality<------------ Has Reached an 80 Year High...again what is inequality, someone has more than you ,or those you think should have money, so your idea is to steal it through taxation?
...While the Federal Tax Burden Has Hit a 60 Year Low........as the federal government spends and spend, to creates a 16 trillion dollar debt, and tells people their no paying enough while the poor pay nothing.
Romney-Ryan Plan Another Massive Tax Cut Windfall for the Wealthy.....does snot matter, not elected
Romney, Ryan Won't Say Which of the $1 Trillion in Tax Breaks GOP Will End.......does snot matter, not elected
Romney-Ryan Will Add More Debt Than President Obama.......does snot matter, not elected


A Republic, Not A Democracy - YouTube

democracy is universal ----------------->equality........what (liberals) want, equality in every aspect of life, socially, economically....IE socialism.

a constitutional republic is -------------->individual liberty what the founders wanted.

the founders hated democracy and wanted to avoid it at all cost.

How many Americans have 401(k)s? How many have any retirement savings about $10K

Conservatives, they live in a dream world.

head of joaquin said:

How many Americans have 401(k)s? How many have any retirement savings about $10K

Conservatives, they live in a dream world.

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lefties-they live in world of hypocrisy and envy

TurtleDude said:

lefties-they live in world of hypocrisy and envy

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Translated: you have no idea how many Americans have 401(k)'s or savings, so your posts on this thread can be ignored as more tea party knownothingism.

NEXT MEME!

head of joaquin said:

Translated: you have no idea how many Americans have 401(k)'s or savings, so your posts on this thread can be ignored as more tea party knownothingism.

NEXT MEME!

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it is the left, with the me, me mentality.

as to you question of 401ks. i have one, and most of the people i know, you would love to get your hands on them and spend others people money, wouldn't you.

i and others have no put our money into our 401k's for many many years,and to have the left try to steal them, as obama would love to do, since government has in the past talked about robbing them........lots of money for them too steal.

head of joaquin said:

Translated: you have no idea how many Americans have 401(k)'s or savings, so your posts on this thread can be ignored as more tea party knownothingism.

NEXT MEME!

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I couldn't care less and your silly response has no relevance to what I said. My assertion that Lefties live in a world of hypocrisy and envy is not defeated by your idiotic question

ernst barkmann said:

it is the left, with the me, me mentality.

as to you question of 401ks. i have one, and most of the people i know, you would love to get your hands on them and spend others people money, wouldn't you.

i and others have no put our money into our 401k's for many many years,and to have the left try to steal them, as obama would love to do, since government has in the past talked about robbing them........lots of money for them too steal.

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What's the point of having an independent retirement account if some idiot in D.C.(Yes, I'm pointing directly at the morons who suggest forcing people into government bonds at a lower "but guaranteed" rate) can screw it up and put it into the same beuracratic mess that can't even handle it's S.S. role with any competence? The worst part of this is as I've come to understand it, the talks started in '08 but have been renewed because treasury bonds aren't selling and the federal wants to move them to get money on the debt, so because these idiots in D.C. have created a climate in which they cannot move bonds to investors both domestic and foreign they want to force people with retirement accounts to buy them with their retirement programs.

If this were a joke it would be a great one, if these politicians did exactly what they are trying without the protection of public office they would be prosecuted for securities fraud, among other unethical market practices.

ernst barkmann said:

it is the left, with the me, me mentality.

as to you question of 401ks. i have one, and most of the people i know, you would love to get your hands on them and spend others people money, wouldn't you.

i and others have no put our money into our 401k's for many many years,and to have the left try to steal them, as obama would love to do, since government has in the past talked about robbing them........lots of money for them too steal.

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Anecdote -- the only way conservatives know how to "argue".

HOW MANY AMERICANS HAVE 401(k)s? Come on, you can look it up before providing us uninformed opionions about tax policy.

TurtleDude said:

I couldn't care less and your silly response has no relevance to what I said. My assertion that Lefties live in a world of hypocrisy and envy is not defeated by your idiotic question

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Translated: your posts on this thread are totally uninformed and unrelated to the actual facts.

What's new?

head of joaquin said:

Anecdote -- the only way conservatives know how to "argue".

HOW MANY AMERICANS HAVE 401(k)s? Come on, you can look it up before providing us uninformed opionions about tax policy.

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uniformed opinions?

twice <<<<-------- under the obama administration, the subject of 401k's and other retirement accounts has come up.

the WH has looked at them, and has figured their are trillions of dollars in those retirements accounts.

since about only half of the population has a retirement account, the government has entertained the idea of getting their hands on that money, by FORCING those investments buy into ---->government treasuries.

this way giving the government a load of cash to continue with more of their liberal spending policies, meanwhile robbing people of their money.

if this idea, were to come even close to true, you will see people bail from those accounts and cash out, to the leave the government as little as possible.

in essence it would be government stealing again.

ernst barkmann said:

uniformed opinions?

twice <<<<-------- under the obama administration, the subject of 401k's and other retirement accounts has come up.

the WH has looked at them, and has figured their are trillions of dollars in those retirements accounts.

since about only half of the population has a retirement account, the government has entertained the idea of getting their hands on that money, by FORCING those investments buy into ---->government treasuries.

this way giving the government a load of cash to continue with more of their liberal spending policies, meanwhile robbing people of their money.

if this idea, were to come even close to true, you will see people bail from those accounts and cash out, to the leave the government as little as possible.

in essence it would be government stealing again.

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So how many Americans have 401(k)s? And what is the average amount of retirement savings Americans have? Come on, you can look it up. I know you can.

LaMidRighter said:

What's the point of having an independent retirement account if some idiot in D.C.(Yes, I'm pointing directly at the morons who suggest forcing people into government bonds at a lower "but guaranteed" rate) can screw it up and put it into the same beuracratic mess that can't even handle it's S.S. role with any competence? The worst part of this is as I've come to understand it, the talks started in '08 but have been renewed because treasury bonds aren't selling and the federal wants to move them to get money on the debt, so because these idiots in D.C. have created a climate in which they cannot move bonds to investors both domestic and foreign they want to force people with retirement accounts to buy them with their retirement programs.

If this were a joke it would be a great one, if these politicians did exactly what they are trying without the protection of public office they would be prosecuted for securities fraud, among other unethical market practices.

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****, if they started doing that, I wouldn't put anything in my 401k and would rather contribute more to my IRA, regular brokerage and other investment vehicles.
That is, if the official retirement vehicles were included.

Then I'd just go with straight taxable brokerage.

Harry Guerrilla said:

****, if they started doing that, I wouldn't put anything in my 401k and would rather contribute more to my IRA, regular brokerage and other investment vehicles.
That is, if the official retirement vehicles were included.

Then I'd just go with straight taxable brokerage.

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If you give these idiots enough time, they'll attack every financial vehicle you own. I've actually heard a few politicians who want to end the tax free life payout, and currently they want to eliminate tax breaks for retirement accounts from pre-tax dollars. These clowns aren't going to be happy until there are riots.

head of joaquin said:

So how many Americans have 401(k)s? And what is the average amount of retirement savings Americans have? Come on, you can look it up. I know you can.

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The average 401k balance is $75,900.
There are an estimated 87 million people (2009 numbers) with 401k accounts.

head of joaquin said:

So how many Americans have 401(k)s? And what is the average amount of retirement savings Americans have? Come on, you can look it up. I know you can.

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i would ask the question, ---------->what difference does it make?

when someone invests in the a retirement account.........its THEIR money, it does not belong to government.

government (has) proposed ( not publicly) to steal people's money in their retirement accounts, by replacing it with government treasuries, which the people DO NOT want.

because the government is broke, and looking for a way to refinance the debt they have created, BY stealing money from the people who have savings.