<p>Wait, what is this about “confiscation of 401ks” ???</p>
<p>Anyone tune in to the administration’s call for unlimited powers to increase the debt?</p>
<p>I want to go hibernate for a decade or so and maybe wake up to a different world.</p>
<p>Wow…</p>
<p>“Wait, what is this about “confiscation of 401ks” ???”</p>
<p>Look how rumors start. :)</p>
<p>Mcat2, we don’t want to start any rumors here. You go to jail if you don’t pay enough estimated taxes. Your toilet is in public view. You have to watch Ben and Kate 14 hours a day.</p>
<p>Oh and this…</p>
<p>[Tax</a> Topics - Topic 306 Penalty for Underpayment of Estimated Tax](<a href=“http://www.irs.gov/taxtopics/tc306.html]Tax”>Topic No. 306, Penalty for Underpayment of Estimated Tax | Internal Revenue Service)</p>
<p>" If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information."</p>
<p>dstark–ok, I will give you that CA has some serious issues with health care (and other things) directly related to issues we can’t discuss on this board :D. I do work in the health insurance industry and I do suggest you shop around for other plans as often there are discounts, etc. for new clients. You keep that plan for a year or two and shop again. That is how it is done in the corporate world all the time and quite frankly is just expected. If you don’t work with an insurance broker, I suggest you get one. Premiums are priced to pay a broker whether you use one or not :D.</p>
<p>Iglooo–the point is to DECREASE your reportable income on your taxes, not increase. You want that number to be as small as possible and donating to a charity is one way, in December, that you can still reduce that number. Yes, donating stocks to a charity can save you money because you don’t have to report capital gains on that donation–which is a huge concern if the AMT doesn’t get fixed. It’s a unique tax situation for 2012/2013 and hopefully something we wont’ need to be concerned with in a month.</p>
<p>I think they call it Nationalization of 401K’s, not confiscation. It’s all over the internet, and this is not new. I don’t know if it’s just paranoid propaganda, but when politicians start getting involved, well, I figure anything is possible. Trust me, I am not starting a rumor, this has been out there for at least four years, Here is one article:</p>
<p>“Is Congress going to nationalize your 401k retirement fund? It sure looks that way if a report in Investor’s Business Daily is correct. Democrats in Congress last fall held hearing on just that proposal . House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., of the Ways and Means Committee are the Congressional authors of a proposed bill that will do just that.”</p>
<p>What they are proposing is to redirect IRA and 401k holdings into US Treasury bonds…since those bonds are no longer selling as rapidly as they once did on the international bond market. This new market will be a new system to which ALL workers will be obligated to contribute 5% of their earnings into accounts that will then purchase Treasury bonds…In other words, Congress will mandate that you buy bonds from the government to fund the present deficit.</p>
<p>In those hearings, that weren’t publicized at the time, a proposal by Teresa Ghilarducci, a professor of the New School for Social Research in New York would be to give all workers “a $600 annual inflation-adjusted subsidy from the U.S. government”. Then, the benevolent government would in return for require those same workers “to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration.”</p>
<p>The model for this concept is taken from the economic power house, Argentina, who in 2008, nationalized all priviate retirement investment accounts. The socialist government did this after the country’s bond rating had been reduced again, just as the US bond rating is now under review by the World Bank. That extra-governmental organization is proposing to reduce the US bond rating from AAA to AA, which would greatly increase the cost of floating bond issues for the United States."</p>
<p>busdriver11-politicians are already involved in your 401K–as in section 401K of the law that allows these accounts to happen. A 4 year old rumor is just that, a rumor. It was an idea tossed out to help stimulate the economy. There would be holy heck to pay if the government really tried to do this :D. Besides, they already control accounts like this called Social Security :D.</p>
<br>
<br>
<p>What I expect is higher tax rates going forward which may mean that you will pay more taxes on your 401K withdrawals than you would have with just having taxes taken out when you earned the income. The benefit of the 401K is the compounding power untaxed. That works for some and not for others.</p>
<p>Is confiscation possible? Of course it is. There’s even precedent for it back in the early 1930s.</p>
<br>
<br>
<p>I definitely remember that.</p>
<p>Though Argentina’s big problem was that their debt was denominated in US dollars. The government went after any hard currency that it could get its hands on, companies, individuals, anyone.</p>
<p>I’d guess that more public discussion of this would send gold up another $200.</p>
<p>dstark, Thanks.
I think these “safe harbor” rules (esp. the latter) could help save some tax payers in this situation.</p>
<p>The executives (e.g., those FB founders) who tend to have steady streams of ISO year after year could be in this kind of tax trouble in some year if they are not careful (but they usually can afford a good tax accountant to help them out.) </p>
<p>Interesting discussion about 401k. At one time, there was a TV show in which they talks about the importance of when/how to take out 401k/IRA money you have accumulated. If not careful, a significant portion of the money in your retirement account may end up in Uncle Sam’s pocket after everything is said and done.</p>
<p>Talking about 401k, a company I worked for before allowed me to contribute a large amount of money into my 401k account right before the end of the year. (I had not contributed enough money to max out my 401K by that time, of course. Otherwise, I would not be allowed to do this.) All the contributions were considered as evenly contributed throughout the year, even if you contribute all the 401k money on Dec. 31. It is only 401k (but not IRA) that is treated in this way by IRS.</p>
<p>Not making me feel any better about this! Well, if it happens, hopefully we can retire and withdraw our money in one fell swoop. Then again, the public would be screaming bloody murder. I just know, though, that they are salivating at the trillions locked up in 401K’s and would love to get access to it.</p>
<p>Think I’ll hang onto my 5K and pay the taxes on it now. Maybe if tax rates go up a fortune next year it would be worth considering.</p>
<p>There is not going to be a confiscation of 401ks. There are a lot of crazy ideas, stupid ideas out there, but it is not going to happen. </p>
<p>I wil bet on it. Who wants to bet? Can we gamble here? It is not really gambling because it is not going to happen. 
IBD is the newspaper for the John Birch society. You get very, very skewed opinions froom IBD. The Economist magazine, or Bloomberg, or yahoo finance are much better sources than IBD. I guess you get some decent stock info from IBD. </p>
<p>Raising the medicare eligibility age is a very bad idea. May happen though. I won’t bet on this.</p>
<p>SteveMA, thanks for stating your line of work. Shopping for insurance is a good idea. </p>
<p>[The</a> Hidden Costs Of Raising The Medicare Age : Shots - Health News : NPR](<a href=“http://www.npr.org/blogs/health/2012/11/29/165154236/the-hidden-costs-of-raising-the-medicare-age]The”>http://www.npr.org/blogs/health/2012/11/29/165154236/the-hidden-costs-of-raising-the-medicare-age)</p>
<br>
<br>
<p>You can’t gamble on something that doesn’t have an open-ended deadline because you can never win. At least in your lifetime.</p>
<p>How about a bet that the US would confiscate private gold holdings?</p>
<p>What’s easier to go after? Private gold holdings or 401Ks?</p>
<br>
<br>
<p>Nobody would doubt they are salivating at the money.</p>
<p>If there is some money somewhere, politicians have had a “good” track record of grabbing it and using it up when it matters (to them), and let the next generation of politicians worry about the lack of money to access.</p>
<p>In a sense, this is what happened to Medicare part D. There is really insufficient revenue to fund this, in the long run at least. But, hey, the interests of my “friends” at the big pharma need to be taken care of. (ditto for protecting the interests of my “friends” in the defense industry.)</p>
<p>^^just as long as they don’t take my guns. Life is full of the possibles. It’s possible that the government is going to confiscate our 401k’s, all our savings, our homes or that whoever is reading this is going to die before they finish this sentence but none of these are probable.</p>
<p>Confiscating our 401K’s is a short term solution, long term it would be a disaster. Look at it logically–you contribute to your plan with a goal of having XXX dollars to retire. You watch your funds, expect X return, which over the life of the plan is very reasonable, then the government confiscates your plan, reduces your rate of return by even a percent, that leaves you with less money in retirement, pretty straight forward. However, that lost money was your discretionary money, money that goes back to companies to hire people, produce more goods, stimulate the economy. When those funds are lost to the business world, taxes go up, government goes more in debt, etc., etc, etc.—sounds a little like 2006-present, except that would be the norm, not the exception.</p>
<p>This is also why the Roth income limits were lifted–to try to get access to those dollars earlier–didn’t work out so well because people didn’t have the cash to pay the taxes…</p>
<p>I’d guess that average 401K returns are probably pretty bad, maybe even negative. In that environment, many might be happy with a guaranteed return over the casino. Obviously it would be easier to do this after a sharp and prolonged market downturn.</p>
<p>'just as long as they don’t take my guns. Life is full of the possibles. It’s possible that the government is going to confiscate our 401k’s, all our savings, our homes or that whoever is reading this is going to die before they finish this sentence but none of these are probable"</p>
<p>Whew! Finished reading that sentence. I’m guessing they take your guns well before those other possibilities.</p>
<p>And true, stevema, confiscating our 401K’s is a short term solution, but I don’t see anyone looking seriously at long term solutions. It’s just putting on a bandaid on something for as long as it takes them to get re-elected.</p>
<p>"How about a bet that the US would confiscate private gold holdings?</p>
<p>What’s easier to go after? Private gold holdings or 401Ks?"</p>
<p>I am trembling with fear. I am so scared. </p>
<p>We can have a date where these things have had to occur.</p>
<p>Jan 20, 2017 is a good date. We will have a new administration at that time.</p>
<p>Neither of the above is going to happen by Jan 20, 2017.</p>
<p>I love the 401k story. People want to be scared and the 401k story delivers. People make a lot of money by scaring people.</p>
<p>I hope my bodily functions work after reading a story like the 401k confiscation story. :)</p>
<p>As far as making money is concerned, let’s go over the fiscal cliff and debate the debt ceiling again - I’ll welcome the opportunity to load up in the market like the last time we had that debt cr**.</p>
<p>I don’t know if we want to ponder your bodily functions today, dstark. No offense.</p>
<p>Let’s go over…</p>
<p>Doct is not scared. I am not scared.</p>
<p>Busdriver11 is a nervous wreck.</p>