Concerned

[EEinNJ]

Is anyone concerned about the possible confiscation of 401k's by the government in the future to subsidize SS and Medicare?

I read about this in a book Larry Burkett wrote called "The Coming Economic Earthquake" written in 1991.

With the way things are going, I cannot rule this out. I am considering moving part of my portfolio to hard assets like real estate.

Any thoughts.

I wouldn't give any credibility to a doom & gloom book written 18 years ago. The one thing in common about futurists whether they are bulls or bears is that they are both generally wrong.

The current bail-outs of Wall Street and banks show that the money flows the exact opposite way, from the gov't. to the financiers who are pulling the strings.

A more likely scenario is that the government will eventually do means testing, and anyone with more than x amount of 401k funds or pension benefit will become ineligible to collect SS.

[kv968]

Here's an easy way to tax 401(k)s...or at least get some of them. Don't allow rollovers to IRAs, force them to go into Roth IRAs instead. Then the person doing the rolling either has to pay the taxes in that tax year or keep it in an old 401(k). Hell, let them split the tax liability into three years to make it easier to swallow. Allow the tax to paid from the roll over (just deduct it during processing or from the Roth IRA account), and people might not even consider it "paying taxes" since it didn't require them to scrounge around for money out of pocket to pay for it.

Although I'm with the majority here in the sense that I agree the gov't will not confiscate 401k's and will instead raise taxes and eligibility ages to fund SS and the like, cptacek is thinking the same thing I am. The gov't could implement a program to where a rollover from a pre-tax contribution account would have to be put into one where taxes have to paid upon conversion.

They're doing it already with lifting the AGI limit on Roth IRA's in 2010. Anyone who previously couldn't contribute to a Roth due to a high AGI could then roll over their traditional IRA to a Roth, paying the taxes owed within a year or two. Granted it's not a mandatory option, but I can see them allowing such conversions from a tradtional 401k to a Roth 401k (if provided) also. Thus getting tax money owed them up front instead of when the person retires. Of course this won't by any means solve the shortfalls of SS and the such but it's yet another "band-aid" for the present.

[LivingAlmostLarge]

Except that if you are in a high enough bracket it may not make sense to do the conversion.

Why Maat, even bother thinking or talking about confiscating the 401ks, when most people don't believe it will happen? Read later posts about the doom and gloom scenarios.

We're better off discussing how and what are possible taxations to make SS solvent. Not unrealistic situations.

[Joan.of.the.Arch]

I went to Amazon.com to see how people had reviewed' this fellow's book. I was amused to see that one of his books was about "the Illimunatti." As presented on Amazon:

Product Description

From before the time of Christ, there have been rumors of a secret society called The Illuminati...a vicious tribe of Druids with mystical, supernatural powers. Many saw them as demons or gods. Those who opposed them simply disappeared...or met an even worse fate.

Unknown to all but the very few, this group slowly infiltrated world organizations and financial institutions with a singular goal--to control the world's economic system.

Now fast-forward to the year 2020. The Illuminati has succeeded in placing one of their people in the office of the presidency of the United States. With the worldwide launch of a financial system known as Data-Net, they suddenly have the power to single out groups of people and control their money, fuel, and food supply. How do you escape an unknown enemy operating at the highest levels who can track your every move? And how do you defeat a society that practices ancient rituals and appears to have power beyond the grave?

The Illuminati is a futuristic thriller tied to ancient mysticism that will appeal to fans of The DaVinci Code and the Left Behind series. It will also leave readers wondering where fact ends and fiction begins.


Obviously published as fiction, does this nonetheless inform us of the type of thinking the of author of the book Maat read and refers to with this 401k confiscation thing?

[ActYourWage]

The person's name is Larry Burkett. This person had some very insightful information.

[Joan.of.the.Arch]

Yeah, Larry Burkett. I failed to mention it, but Maat55 did mention it in the original post. I think he used to have a Christian radio show out of Colorado Springs, CO, but I could be mistaken.

[MonkeyMama]

I kind of giggle reading the last few posts.

I have no doubt government will very cleverly find ways to increase tax revenues. Let's face it, the more complex taxes get, the less anyone understands it. AMT, anyone? (This is a cleverly disguised tax increase if I ever saw one. Wasn't the intent - but it's precisely what it is now).

Every time I read an article about ROTH conversions in 2010 - commenters wonders if the government will take away this wonderful tax "loophole." Of course not! The government put it their to generate tax revenues. & people are lining up in droves to pay it. The 401k/ROTH idea is not far fetched.

California has it down. They just withhold money you don't owe (interest free loan anyone?) and require you pay in Estimates faster than you earn the money. The average person doesn't care about any of this (though I sure scream and holler). Average person is clueless. But god forbid they raise a tax rate.

How many of you even know that social security income is taxed? Very AMT-esque. Income threshholds never index for inflation. Result? High taxes in retirement. & everyone is sitting around dreaming of low-tax retirement. Good luck with that.

I could go on all day how government raises revenue without messing with the basics like "tax rates" and "exemptions." The average person hasn't a clue.

Let's face it - government rather do it behid your back, where you are not looking. Why confiscate your 401k when they have all sorts of other tricks up their sleeve?

[Snodog]

I like Larry Burkett and used to listen to him but I think he is off on this one. Sure we have problems but name me any other time in history that we didn't. And name me any other country that don't have it's share of problems. In fact most countries have far greater problems.

Sure its possible that the government will confiscate 401K's just like its possible the moon will fall to the earth. If things get so bad that they would confiscate 401K's a 401K would be the least of your worries. Might as well cash it in and invest in food, guns, medical supplies, and a crank flashlight.

You can't protect yourself from a worst case scenario. In a worst case scenario we are all dead.

[maat55]

I went to Amazon.com to see how people had reviewed' this fellow's book. I was amused to see that one of his books was about "the Illimunatti." As presented on Amazon:

Product Description

From before the time of Christ, there have been rumors of a secret society called The Illuminati...a vicious tribe of Druids with mystical, supernatural powers. Many saw them as demons or gods. Those who opposed them simply disappeared...or met an even worse fate.

Unknown to all but the very few, this group slowly infiltrated world organizations and financial institutions with a singular goal--to control the world's economic system.

Now fast-forward to the year 2020. The Illuminati has succeeded in placing one of their people in the office of the presidency of the United States. With the worldwide launch of a financial system known as Data-Net, they suddenly have the power to single out groups of people and control their money, fuel, and food supply. How do you escape an unknown enemy operating at the highest levels who can track your every move? And how do you defeat a society that practices ancient rituals and appears to have power beyond the grave?

The Illuminati is a futuristic thriller tied to ancient mysticism that will appeal to fans of The DaVinci Code and the Left Behind series. It will also leave readers wondering where fact ends and fiction begins.


Obviously published as fiction, does this nonetheless inform us of the type of thinking the of author of the book Maat read and refers to with this 401k confiscation thing?

I have somewhat looked into the New World Order conspiracy theory junk, but find it far fetched.

I will say that as a christian, I do not rule out a future NWO type scenario led by the Anti-christ. Wether or not the current day NWO theories apply to a part in that future, I have no idea. I would think that when it occurs, it will have been orchestrated in advance.

Larry Burkett being christian may have opened his mind to the possibility of current players in a possible NWO. I have only read two of his books and neither alluted to this theory. What I have read would lead you to believe he advocates sound Godly principles with personal finance.

[maat55]

Except that if you are in a high enough bracket it may not make sense to do the conversion.

Why Maat, even bother thinking or talking about confiscating the 401ks, when most people don't believe it will happen? Read later posts about the doom and gloom scenarios.

We're better off discussing how and what are possible taxations to make SS solvent. Not unrealistic situations.

You open up a big can of worms when you get into future taxation to cover current financial situations. I'm up for the debate, but it is likely blood will be spilled at some point.

My personal view is that our country has crossed the line of moral hazard by taking on the current deficits and entitlments. I do not consider further taxation as viable for a free society and that entitlments need to be eliminated in order to reduce the deficits and debt.

Both roads will be painful, I choose the road of sacrifice over the road of futher entitlments.

You are of the mindset that we fix(raise taxes), I would rather take the big step of ending them now through a faze out.

[cptacek]

Except that if you are in a high enough bracket it may not make sense to do the conversion.

I agree. That is why in my hypothetical I said "Don't allow rollovers to IRAs" which would force people to pay it if they wanted to roll it over.

[jeffrey]

Just a friendly reminder to all, the topic of this thread has nothing to do with healthcare -- lets try to stay on topic.

[maat55]

Just a friendly reminder to all, the topic of this thread has nothing to do with healthcare -- lets try to stay on topic.

Not entirely true. Our 401k's or nest eggs are largely affected by our healthcare costs and system.

But, healthcare is only one of the many elements to the large growing problem of government insolvency.

Yes, the thread is not specifically to address healthcare. It is to address wether there is reason to be concerned if the government will have a financial meltdown and where are our safe havens.

It is hard avoid the elements that surround a subject like this. What government might do durring a possible meltdown or what they might do to avoid it, has led us to the place.

Is it possible that the government will have a financial meltdown?

What might the government do if one occurs?(that affects our investments)

How might our investments be affected? What are our safe havens?

Things the government might do to avoid it is off the table.

[jeffrey]

@ maat55

Obviously you failed to understand the in my post -- my bad. Health care is fine to discuss as long as it doesn't turn political. Until this point, however, a few members have proven that they seem incapable of talking about healthcare without making it political -- thus my having to delete some off-topic posts to save this thread from going into everything else and the reference that this thread isn't specifically about healthcare.

[maat55]

@ maat55

Obviously you failed to understand the in my post -- my bad. Health care is fine to discuss as long as it doesn't turn political. Until this point, however, a few members have proven that they seem incapable of talking about healthcare without making it political -- thus my having to delete some off-topic posts to save this thread from going into everything else and the reference that this thread isn't specifically about healthcare.

I took it as a nice way of saying stop it.


LAL, I don't mean to say that you are for higher taxes, but that you seem to easily accept it as an option.

In reality, we are forced to live on 60% and less of our incomes due to government taxation.

We as savers know that in order to save and build wealth, we have to cut spending beit wants and reduction of needs, so that we can continue to prosper. This does not appear to be the same logic used in government.
they continue to spend, promote bad financial habbits and create new entitlments. IMO, this will lead to insolvency and possible nuclear options.

The nuclear option is now being discussed on healthcare passage, why is believing they could use it during an financial meltdown not possible?