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Welcome to the world of socialized retirement funds  

post #1 of 23
10/23/08 at 5:47pm
Thread Starter 
And with a possible Democratic Presidency and outright majority in Congress, if they are elected we can likely count on this.

http://www.workforce.com/section/00/...e/25/83/58.php

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

“I want to stop the federal subsidy of 401(k)s,†Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.â€



OUTRAGEOUS!!!
post #2 of 23
10/23/08 at 6:06pm
I'm not sure what's outrageous... just that 401k deductions will no longer be pre-tax? Am I missing something?

And what evidence is there that Obama has anything to do with it?
post #3 of 23
10/23/08 at 6:18pm
Thread Starter 
Quote:
Originally Posted by Zissou'sMom View Post
I'm not sure what's outrageous... just that 401k deductions will no longer be pre-tax? Am I missing something?

And what evidence is there that Obama has anything to do with it?
Re-read the article.

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.


And you're getting too defensive, I never mentioned BHO. I said if we have a Democratic Pres and majority, chances are better of this Democratic idea being passed.
post #4 of 23
10/23/08 at 6:18pm
Oh boy...worker subsidies! Do you think we'll get uniforms too?

By the time the market is done with your 401K you might not have to worry about it anyway.
post #5 of 23
10/23/08 at 6:27pm
Quote:
Originally Posted by Cinder View Post
Oh boy...worker subsidies! Do you think we'll get uniforms too?

By the time the market is done with your 401K you might not have to worry about it anyway.
No doubt! I won't get into amounts, but I've already lost enough money to have bought a new car.
post #6 of 23
10/23/08 at 6:39pm
Gottal love them Socialists. They know how to take care of your money better than you do. NOT

Get ready, it's a comin'
post #7 of 23
10/23/08 at 8:08pm
My RRSP's aren't faring very well either.
post #8 of 23
10/23/08 at 8:32pm
Just to put it all in perspective, Robert Reich, Clinton's labor secretary, spouted one of his favorite ideas during Clinton's administration, which would be to confiscate a portion (I think he said 10%, but don't quote me) of all 401K's and IRA's in the U.S. and invest the funds in public works. Being a crackpot university professor, the idea got all the attention it deserved--about two days of discussion, in a slow news week. Nothing ever came of it.
post #9 of 23
10/24/08 at 5:19am
Thread Starter 
Its gone so far as to have committee meetings AND a public hearing on it this week.

And realize this is not replacing our SS system. This is an additional plan, not optional.

Again, take your chances with a Democratically controlled Executive and Legislative branch if you wish.
post #10 of 23
10/24/08 at 6:19am
Quote:
Originally Posted by neetanddave View Post
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

“I want to stop the federal subsidy of 401(k)s,†Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.â€

[/i]

OUTRAGEOUS!!!


Yeah right. Like this will ever pass. This is a passing blip. The investment lobbyist will have a field day. Bunch of hot air.
post #11 of 23
10/24/08 at 6:27am
Has anyone thought about the implications of the republican proposal to privatize social security? Let's see, people keep their own money and invest it in the stock market.

I've already lost 50% of my 401K and other investments with the stock market crash. If my social security was in there on top of it, I basically would never be able to retire.

I heard some financial analysts talking about the OP plan last night. It would provide an alternative that was safer than the fluctuations in the stock market, as a 401K is today.

I see merit in people trying to protect themselves from the insanity of Wall Street.
post #12 of 23
10/24/08 at 6:35am
Quote:
Originally Posted by neetanddave View Post
Its gone so far as to have committee meetings AND a public hearing on it this week.

And realize this is not replacing our SS system. This is an additional plan, not optional.

Again, take your chances with a Democratically controlled Executive and Legislative branch if you wish.
I looked on the Department of Labor website and there is no evidence of any committee meeting or public hearing. In fact I can't find anywhere where this happened. But I don't have the time to look everywhere. I just hit the major searches. I work in the investment industry and don't think this has a snowballs chance.
post #13 of 23
10/24/08 at 6:41am
Thread Starter 
Quote:
Originally Posted by Momofmany View Post
Has anyone thought about the implications of the republican proposal to privatize social security? Let's see, people keep their own money and invest it in the stock market.

I've already lost 50% of my 401K and other investments with the stock market crash. If my social security was in there on top of it, I basically would never be able to retire.

I heard some financial analysts talking about the OP plan last night. It would provide an alternative that was safer than the fluctuations in the stock market, as a 401K is today.

I see merit in people trying to protect themselves from the insanity of Wall Street.

The Republican plan gives people the OPTION of investing a portion of their SS benefits into a private plan. Nothing mandatory, and its not an option for people over a certain age now.

It's your money, you should be able to decide where it goes and how much of it you want to contribute, if any. The government has no business requiring an additional 5% on top of the 7% we already pay to SS to put into "bonds" or anything else.

It might indeed be a safer thing thatn investing your 401k in the stock market, but it being mandatory is basically creating a new "tax" so to speak.
post #14 of 23
10/24/08 at 6:44am
Quote:
Originally Posted by neetanddave View Post
And you're getting too defensive, I never mentioned BHO. I said if we have a Democratic Pres and majority, chances are better of this Democratic idea being passed.
Oh, sorry. I assumed by democratic president you meant the person who would be the democratic president. I'm not sure he would go for it. I don't think anyone but the guy in the article would go for it. Your post implies that if Obama gets elected and we keep a democratic majority in Congress, this will happen, and it won't.

And we already have socialized retirement plans. They're going to have to do something about it to pay for it, or everybody my age is just paying 20% of their paychecks for nothing. The way it is now is unsustainable-- all the baby boomers want more, more, more when they retire, and there won't be anything left.
post #15 of 23
10/24/08 at 7:57am
Quote:
Originally Posted by Momofmany View Post
I've already lost 50% of my 401K and other investments with the stock market crash. If my social security was in there on top of it, I basically would never be able to retire.
While the current fall is discouraging, it's important to note that there has never been a 10-year period when the stock market didn't make money. Four out of five five-year periods have been profitable, and 2 out 3 three-year periods have been profitable. While the past is no predictor of the future, that's what most investors are betting. And I'm with Warren Buffett; I've been buying all the way down, until I have all my available cash in stocks now. I haven't sold anything, except one stock that I was even on but looked to me to have exposure in the re-insurance market.
post #16 of 23
10/24/08 at 8:05am
Quote:
Originally Posted by mrblanche View Post
While the current fall is discouraging, it's important to note that there has never been a 10-year period when the stock market didn't make money. Four out of five five-year periods have been profitable, and 2 out 3 three-year periods have been profitable. While the past is no predictor of the future, that's what most investors are betting. And I'm with Warren Buffett; I've been buying all the way down, until I have all my available cash in stocks now. I haven't sold anything, except one stock that I was even on but looked to me to have exposure in the re-insurance market.
I agree. And if I were 65 years old and about to retire, I'd be in deep dodo. Market swings will always occur. If you are one of the unlucky ones that are depending on drawing on their investments at the point they are down, it really limits your ability to retire.
post #17 of 23
10/24/08 at 11:21am
Quote:
Originally Posted by Skippymjp View Post
No doubt! I won't get into amounts, but I've already lost enough money to have bought a new car.
I can empathize - for us, it would have been a Porsche Cayenne.
post #18 of 23
10/24/08 at 9:25pm
This is absolutely insane! Lets just discourage people for saving for their retirement and being responsonsible on their own...better yet, let's take MORE of their hard earned money out of their pay checks and pass it around to the lazy bums who do not want to work for a living yet don't mind mooching off the federal gov't.

Lets see many folks (the type that milk the gov't for all they can get and enjoy free hand outs - i'm not refering to the ones who are truly in bad situtions and really need help) alrady get food stamps, medicade, and soo many other gov't funds...why not give them retirement money too! MADNESS! Let's punish the people who actually are responsible and plan for their retirement....and reward the people who do nothing to contribute towards society! How idiotic is that!
post #19 of 23
10/24/08 at 9:32pm
That is what "spreading the wealth around" is Starry Eyed Tiger. Pretty sickening isn't it?

I got an email that puts it in perspective.

Today on my way to lunch I passed a homeless guy with a sign
that read "Vote Obama, I need the money." I laughed.

Once in the restaurant my server had on a "Obama 08" tie, again
I laughed as he had given away his political preference -- just imagine
the coincidence.

When the bill came I decided not to tip the server and explained
to him that I was exploring the Obama redistribution of wealth concept.
He stood there in disbelief while I told him that I was going to
redistribute his tip to someone who I deemed more in need - the homeless
guy outside. The server angrily stormed from my sight.

I went outside, gave the homeless guy $10 and told him to thank
the server inside as I've decided he could use the money more. The
homeless guy was grateful.

At the end of my rather unscientific redistribution experiment I
realized the homeless guy was grateful for the money he did not earn,
but the waiter was pretty angry that I gave away the money he did earn
even though the actual recipient deserved money more.

I guess redistribution of wealth is an easier thing to swallow
in concept than in practical application.

REDISTRIBUTION OF SOMEONE ELSE'S WEALTH

GREAT IDEA ... or just a fools game?
post #20 of 23
10/24/08 at 10:35pm


That's a good one.
post #21 of 23
10/25/08 at 3:14am
Quote:
Originally Posted by mrblanche View Post
While the current fall is discouraging, it's important to note that there has never been a 10-year period when the stock market didn't make money. Four out of five five-year periods have been profitable, and 2 out 3 three-year periods have been profitable. While the past is no predictor of the future, that's what most investors are betting. And I'm with Warren Buffett; I've been buying all the way down, until I have all my available cash in stocks now. I haven't sold anything, except one stock that I was even on but looked to me to have exposure in the re-insurance market.
I am not touching my daughter's fund or her stocks. My stepson is set to inherit some money from my ex's father and I urged my ex to hold on. Don't panic. I trust Warren Buffet about money. I heard he may have a cabinet position if Obama wins.
post #22 of 23
10/25/08 at 9:03am
Thread Starter 
Quote:
Originally Posted by CC12 View Post
I am not touching my daughter's fund or her stocks. My stepson is set to inherit some money from my ex's father and I urged my ex to hold on. Don't panic. I trust Warren Buffet about money. I heard he may have a cabinet position if Obama wins.
Not an option if the Dems get their plan passed. You'll be putting it in something besides a 401k and managing it yourself. The stock market will be out of the picture for your 5%.

Any bets that Companies won't match any contributions either?
post #23 of 23
10/26/08 at 5:49am
Quote:
Originally Posted by neetanddave View Post
Not an option if the Dems get their plan passed. You'll be putting it in something besides a 401k and managing it yourself. The stock market will be out of the picture for your 5%.

Any bets that Companies won't match any contributions either?
You are probably right about the matching funds part. My older brother said his 401K got slammed pretty hard. No one is rushing in to replace the funds either.


My SS's money is handled by an accountant since he is still in college. He is too old to have been my own child but I do care for his welfare like a mother. I care for his inheritance because he will need it to be doled out correctly and handled wisely so he will have income for life. Luckily the accountant is conservative and not some risk taking fool with other people's money. I am so glad I am not a gambling type myself or things could have looked mighty bleak.
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