TINFOILHAT: BHO44 targets IRS/401Ks


Updated April 12, 2013, 12:13 p.m. ET

Now He’s After Your 401(k)
The White House pulls a switcheroo on retirement savings accounts.

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Thus do our political betters now feel free to define for everyone what is “needed” for a “reasonable” retirement. Not to be impertinent, but does this White House definition include being able to afford summers at age 70 at Martha’s Vineyard near the Obamas?

The feds may think $3 million is all you need after a lifetime of work, but that’s roughly the value of a California police sergeant’s pension if she works for 30 years, retires at age 50 and lives to normal life expectancy.

Out in the private economy, people generally have to work longer than that before they retire, and some of them do manage to save significant amounts. We’re talking about people who work for decades and abstain from buying the bigger house or the new car so they can contribute the maximum to their 401(k)s or IRAs. The people who defer gratification and build a nest egg to avoid becoming a burden on their kids or their fellow taxpayers. The people whose savings finance productive enterprise. You know, the bad guys.

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The Administration’s political motive here is two-fold: First, it’s a redistributionist play and a revenue grab. But for many on the left it’s also about reducing the ability of individuals to make themselves independent of the state. They have always disliked IRAs, just as they oppose health-savings accounts, because over time they make Americans less dependent on federal entitlements or transfer payments. 

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Yeah, I know you all think I have a tin foil hat! So what.

Now the Wall Street Journal is in the same genre?

My concern is this is the first step towards exchanging your IRA/401K for an “enhanced social security benefit”.

I read somewhere that there is 14T$ in such plans. Held and controlled by ~2100 “custodians”. And the Gooferment needs about 13T$ to get back on an even keel.

Remember what happened in Cyprus?

Yeah, and I have a tin foil hat.


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MONEY: Tax deferred maybe a trap!


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That’s the message in President Obama’s budget for fiscal 2014, which for the first time proposes to cap the amount Americans can save in these tax-sheltered investment vehicles. The White House explanation is that some people have accumulated “substantially more than is needed to fund reasonable levels of retirement saving.” So Mr. Obama proposes to “limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million for someone retiring in 2013.” 

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When the big IRA / 401k accounts are thought about logically, are they not converting “capital gains” into “ordinary income”?

Would they be better off making investments in taxable accounts?

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MONEY: Error Employees Make


The Most Common Error Employees Make

For Immediate Release
August 10, 2012

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Unfortunately, only 9% of the nation’s 60 million workers who are eligible to participate in 401(k) plans contribute the maximum, according to the Employee Benefit Research Institute. The Plan Sponsor Council of America says only 5% of employees do so. And a recent survey by CouponCabin found that 73% of Americans aged 18–34 — the group whose long-time horizon offers them the best chance of creating wealth by retirement — don’t invest for retirement at all.

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I’m not a “financial advisor”. Nor do I play one on TV. 

Remember the sources of my education: I’m just a fat old white guy injineer with: Law “degree” from watching Judge Judy; Medical “degree” from watching Doctor Phil; Building “degree” from watching “Holmes on Homes”; Investing “degree” from reading about Bernie Made-off; and creating caring human relationships from studying the movie roles of Gunny Ronald Lee Ermey!

And, while generally and usually agree with Ric, and by way of disclosure I am a Customer of Ric’s, I think I’d like to quibble with him a little.

Not that folks should be worried about the future and saving everything they can. He and Dave Ramsey together are good pundits. But I disagree with both around the edges.

But back to Ric and 401Ks.

There are at least three specific incidents where the 401K advice hits a boundary.

(1) Some 401Ks REQUIRE you to rollover into the company’s 401K. There is the infamous case of the guy who rolled a million dollar PGE IRA into Enron and is now living on welfare or social security.

(2) Some 401Ks are really “house organs”. The CFO makes a sweetheart deal and the employees get screwed. High fees, limited choices, and you name it.

(3) Some 401Ks are not worth chasing to get the limited match.

Then there are some TINFOILHAT considerations:

(A) The Gooferment desperate for money needs 13T$. The IRA / 401K holding is 14T$. All the politicians and bureaucrats have to do is to twist the arms of ~2500 “custodians” and give the “owner” an “enhanced social security benefit” and all their portables are solved. For YOUR OWN GOOD of course. (Yeah, it can’t happen here — the FDR gold grab, GM bailout, … … the Japanese Internment, Trail of Tears, … … yeah trust your Gooferment.

(B) The 401K is in dollar denominated assets.What if the Fed does QE3+4+5 … and we get a Carter stagflation? Remember 21% Treasury Bills that were losers in a 30% inflation world? The dollar has lost 99% of its purchasing power in 30 or 40 years at a few percent. No doubt that I like nickels, silver and gold.

All I’m saying is do trust. Have a Plan B, Plan C … and some bullion in your basement.

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POLITICAL: Irish pensioners targets of revenue enhancement


Irish pensioners fury over new taxes
Previously “untouchable” state services get cuts
ByPADDY CLANCY,Irish Voice Reporter
Published Thursday, January 12, 2012, 7:57 AMUpdated Thursday, January 12, 2012, 7:57 AM

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Savage cuts to a host of previously “untouchable” state services are now being actively considered by the government as a result of Ireland’s dire financial position.

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In the search for money to feed the Gooferment spending habit, the “pensioners” are a good target. They don’t “move” so quick. But they do vote.

Look for this idea to travel over the pond and get adopted here.

The USA Gooferment is in perpetual deficit, with an incalculable debt, the IRA / 401K total is about 14T$. Look for the politicians and bureaucrats to steal that.

You heard it. Steal it in exchange for an “enhanced social security benefit”.


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MONEY: Might your employer be at fault for your 401k loss?


October 11, 2008 Your 401k Plan – Breach of Fiduciary Duty? Posted by Karen DeCoster at October 11, 2008 06:24 AM

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Some friends and family have asked me to advise them on their choice of investments because they are down – an obvious point – in their 401k plans. A bit late, and there’s not much you can do anyways. But …prior to the meltdown, so few people were really willing to understand and believe that there was a financial storm in their future.

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While snooping around, I immediately noticed something in this Wachovia plan that is epidemic nowadays. There is absolutely no option to invest in something that is low in risk. Typically, if you are predicting that the market will go South (as I have been for years), you’d look for a 100% US T-Bill option in your 401k, even if you only park it there in the short term. However, this person’s plan had absolutely no low-risk option whatsoever.

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I know that everyone TRIES to keep liability at arm’s length from the business.

BUT, (there is always a big butt),

in this case, I think there may be a claim that has some merit against the employer and the fund company.

In my younger days, I would sneer at derision at “guaranteed return” offerings. I still do.

(Look at all those “safe” bond funds who have Lehman bonds in their portfolio, and tell me about safe! Money market funds as well. Icelandic banks. Inet banks. Yada, yada, yada!)

If a 401k has no “guaranteed” offering, I suspect that a claim could be made and imho would be paid off quietly.


Disclaimer: I’m not a lawyer, CPA, or even “thin, young, and handsome” any more. (Any More?)

Get me on the jury, present me with a good case, and I find for the “little guy” all the time.

Just my nickel’s work. (Two cents after inflation?)

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