A spread the wealth plan for your 401K??

[Fingon]

You know, that's not a bad point either. (Serious, non-Godwin reference coming up.) Germany in the '30s financed their deficit spending off mandated savings which banks were required to invest in German bonds. If our creditor nations stop buying (and keep in mind, in a global recession, if American consumption falls, it's not outside the realm of possibility that China's balance of trade with us drops enough so that they reduce their buying of treasuries), where's the government going to turn to?

China is really faltering... i think they will step up their long term investment in the USA. However, they could just flood the market with extremely cheap goods.

[finknottle]

You know, that's not a bad point either. (Serious, non-Godwin reference coming up.) Germany in the '30s financed their deficit spending off mandated savings which banks were required to invest in German bonds. If our creditor nations stop buying (and keep in mind, in a global recession, if American consumption falls, it's not outside the realm of possibility that China's balance of trade with us drops enough so that they reduce their buying of treasuries), where's the government going to turn to?

 

Under those circumstances, it wouldn't make my head explode. AS LONG AS I GOT THE SAME DEAL AS EVERYBODY ELSE! As the uncle said in Dr. Zhivago, "I'm one of the people too!"

 

Meanwhile, I'll just sit here and wait for the next $500 stimulus check. You know, the ones that are not handouts, but are supposed to stimulate the economy through consumer spending? Apparently, I don't spend as good as somebody on welfare, because I didn't get one last time and I doubt I'll get one this time, even though I'm paying for them. Maybe I should promise to buy beer and lottery tickets instead of books and kitchen products?

[/dev/null]

Meanwhile, I'll just sit here and wait for the next $500 stimulus check. You know, the ones that are not handouts, but are supposed to stimulate the economy through consumer spending? Apparently, I don't spend as good as somebody on welfare, because I didn't get one last time and I doubt I'll get one this time, even though I'm paying for them. Maybe I should promise to buy beer and lottery tickets instead of books and kitchen products?

 

Woohoo more free gubmint money

 

If they're stupid enough to do it again, I'll just do the same thing I did with the last one. Put it in the bank

[Typical TBD Guy]

Its amazing how many people here think their so informed. Jump on the train, Dude!!

 

I'm surprised the following "dismal science" scholars at PPP haven't yet offered their nuggets of wisdom in this thread:

 

Molson Golden

ExiledinIllinois

justnzane

pbills

PastaJoe

Johnny Coli

blzrul

elegantellioteffen

 

Maybe they're all waiting for Andrew Leonard to post his Keynesian talking points spin on this seemingly indefensible economic plan?

[YellowLinesandArmadillos]

Dumb idea.... even if this not credible... dumb idea. I don't even begin to know the numbers and how it would affect people, but it is dumb politics and figures that it was being reviewed by Miller... He is to the left of Carl Marx.

[Jon in Pasadena]

What a horrible idea.

 

I'd even go so far as to speculate that a better plan would be to do the exact opposite as this Ghilarducci person's plan: phase out SS for new applicants gradually over a set timetable down to zero, and compensate the people who will get shafted by increasing the tax deductability of their 401k contributions. That way the Feds would be exchanging a possible revenue hit for a few years for a guaranteed reduction in entitlement spending forever. The people who're already retired wouldn't be affected at all, the people (like myself, probably) who would be partially shafted by the plan would have some tax relief to cushion the blow, and all those born after SS was phased out would live in a world where they were accountable for their own financial security. It's not perfect, but I think it's much better than the cluster-!@#$ that is the Ghilarducci plan.

[/dev/null]

So if i have to contribute 5% to the government mandated 401k, can i opt out of social security?

[swede316]

Ya know it's not just the President being elected...Vote out this Congress too! Especially Pelosi!!!

[SD Jarhead]

I'm surprised the following "dismal science" scholars at PPP haven't yet offered their nuggets of wisdom in this thread:

 

Molson Golden

ExiledinIllinois

justnzane

pbills

PastaJoe

Johnny Coli

blzrul

elegantellioteffen

 

Maybe they're all waiting for Andrew Leonard to post his Keynesian talking points spin on this seemingly indefensible economic plan?

 

Hmm, The Lefty's have no opinion on this (save Yellow)? I'm shocked. just shocked I tell you...

[TheMadCap]

Oh come on, that can't possibly be true. No one is actually that stupid to go along with that are they? Not even the Democrats are that blatantly retarded...

[Chef Jim]

I know but it makes no sense that you can w/d at 55 if you leave it in your 401k and not in an IRA

 

Shhhhhh.

 

Oh, btw, it's not as bad an idea as some of you think. I assume that when you pull money out a retirement it will all be tax free. You didn't get a deduction when you contributed the money and paid taxes on the gains as you went. So it's all basis and therefore not taxable at retirement. So it's really no big deal. Either you pay taxes now or when you're retired. I'd rather pay them now when my paycheck is higher. Now that 3% government bond thing....well that's a different story.

 

I also would consider it if they increased the income eligibility of a Roth IRA.

[KD in CA]

I like the idea of a Children's Roth.

Sorry, you make more than $35,000 per year so you won't be eligible. Gotta make sure we spread some wealth away from your kids.

 

 

Oh come on, that can't possibly be true. No one is actually that stupid to go along with that are they? Not even the Democrats are that blatantly retarded...

You assume much that is not so, young Jedi.

 

 

Look for a total collapse of the financial sytem both here and abroad between Nov. and Jan. if Obama is elected. They do not like Obamas tax program ,they are not keen on McCains but less so on Obamas.

I've been looking for a reasonable bottom to jump back into the market with a fair chunk of my retirement. But the more I read about what these idiots want to do, the more I think I ought to put it in my mattress.

[taterhill]

I also would consider it if they increased the income eligibility of a Roth IRA.

I agree

[molson_golden2002]

I for one appreciate the McCain campaign treating us like children. McCain will bring us back to a simpler time. A time when you could identify your neighbors’ jobs by the hats they wore. Like Sam the Fireman, Bill the Cowboy and Jose the stereotype. These are the people in your neighborhood. The people that you meet when you’re walking down the street. They’re the people that you meet each day. And what the people in your neighborhood, the Joe the Plumber, the Wendy the Waitress need are tax cuts for the wealthy and off shore drilling. They don’t need universal health care or last names.

 

--Steven Colbert

[Johnny Coli]

It was a single proposal among several at a hearing that examined the current 401(k) system. The person floating the proposal is not a legislator, it is not actual legislation up for a committe vote, and that person's proposal would definately not even make it out of committee. The hearing was only examining the current system in light of the devastating losses suffered to people's retirement plans this year. (A less hysterical article)

 

401(k) plans and IRAs collectively had lost $2 trillion from equities alone in the year ended Oct. 9, according to new paper by Alicia Munnell, director of the Center for Retirement Research at Boston College. Ms. Munnell also estimated that defined benefit plans experienced $1.9 trillion in stock losses during that time.

 

There were other proposals floated as well:

A less radical idea under consideration would permit all workers to contribute to “universal” 401(k) plans.

 

At the hearing, Jacob S. Hacker, a professor political science professor at the University of California, Berkeley, said the investment default for the universal 401(k) would be a low-cost target-date fund, paid out in annuities at retirement.

 

“In essence, universal 401(k)s along these lines would bring back something close to a guaranteed private pension,” referring to the plan's annuitization feature, Mr. Hacker said in his testimony.

 

None of these proposals are actual legislation. None are up for a vote at any level. None are even in the beginning stages of ever seeing the light of day. People got slaughtered with respect to their 401(k) this year, and a comprehensive examination of whether those losses could be prevented in the future seems pretty responsible, really.

 

To repeat: This is not legislation. This is not going to happen. The world is not going to end on November 4th.

[Chef Jim]

The world is not going to end on November 4th.

 

No, it will take a few months.

[bills_fan_in_raleigh]

No, it will take a few months.

So are you telling me sell everything and get into cash . Plus I thought the world doesnt end till 2012?

[bills_fan]

Shhhhhh.

 

Oh, btw, it's not as bad an idea as some of you think. I assume that when you pull money out a retirement it will all be tax free. You didn't get a deduction when you contributed the money and paid taxes on the gains as you went. So it's all basis and therefore not taxable at retirement. So it's really no big deal. Either you pay taxes now or when you're retired. I'd rather pay them now when my paycheck is higher. Now that 3% government bond thing....well that's a different story.

 

I also would consider it if they increased the income eligibility of a Roth IRA.

 

 

You know, I'd rather wait to pay the taxes. Given the boomer retirements and dependency on 401(k)s, I could see a populist movement over the next decade to reduce the rates you are taxed to capital gains rather than ordinary income. That has always been my contention why a 401(k) was a superior investment option to a Roth, and should be maxed before even considering a Roth.

[Chef Jim]

You know, I'd rather wait to pay the taxes. Given the boomer retirements and dependency on 401(k)s, I could see a populist movement over the next decade to reduce the rates you are taxed to capital gains rather than ordinary income. That has always been my contention why a 401(k) was a superior investment option to a Roth, and should be maxed before even considering a Roth.

 

What about required minimum distributions. I hate the government telling me I HAVE to pull money out of my retirement whether I need it or not. If there is no tax due at the other end there would probably be no RMD such as the case with Roths.

[bills_fan]

What about required minimum distributions. I hate the government telling me I HAVE to pull money out of my retirement whether I need it or not. If there is no tax due at the other end there would probably be no RMD such as the case with Roths.

 

 

True, but I think that, given my age/horizon, I'd rather be in a fully funded 401(k) before a Roth right now and piggyback off any legislative, populist reforms the boomers may push through in the neext 15 years. You and I don't like being forced to take RMDs, neither will the boomers. And they ahve the legislative clout to push through politicians that protect their interests. Once the cash is gone, as in a Roth, you won't get it back. But if its still there, as in a 401(k), you may get to keep more of it.

 

Of course, after a 401(k) is fully funded, a Roth is great idea.