Watch out some economists are floating the idea of confiscating

[doc03]

your 401k and IRA to fund SS. Those of us that saved money for retirement my end up paying for those that
didn't.


https://www.kiplinger.com/taxes/should-401k-be-eliminated-to-save-social-security?utm_term=1686D33E-65EF-4642-B861-F47F1701F88D&lrh=9a3aeac9e77c00e54a0f7afa1f33462c415a8ab91a6ac2bf4a3ec47adf9ea844&utm_campaign=231AB69E-1652-46EB-A977-6F2C6C998083&utm_medium=email&utm_content=B2151453-044B-442D-8B27-A64944E5C790&utm_source=SmartBrief

[Scrivener7]

1. Where do you see anything in the article about confiscation?

[doc03]

3. They use the word eliminated, sounds like the same thing

as confiscate to me. I pay into my IRA/401K and they take it to fund SS, what else is it. I put
a percentage of my income in an IRA and later in a 401K, I can now withdraw more for my IRA every
month for the rest of my life than I get from SS.

[3Hotdogs]

7. Eliminate tax breaks is different than taking your money.

[TheFarseer]

13. It sounded to me

Like they were advocating eliminating preferential tax treatment for those retirement plans. I personally think that would be an Ok idea.

On edit - So really you would just have a brokerage account then and you would still be getting a special low tax rate on cap gains and dividends. Doesn’t sound so bad.

[doc03]

14. If they eliminate the tax advantage it would be the same as eliminating

the program. The tax is not eliminated by putting money in a 401k or IRA it is "deferred" until you withdraw.
The whole idea of the 401k and IRA was to encourage people to save for their retirement.

[3Hotdogs]

18. But that is still not the same as "confiscating."

The money you put in would still be there. I don't support the elimination of the tax benefits.

[Scrivener7]

16. Not the same thing at all. They're not going to confiscate your accounts.

And the article isn't saying they are.

[SWBTATTReg]

2. This has been touted as an option for some time. I doubt that it'll happen, but what I do think will happen is that

the ability to fund your own 401Ks and IRAs will diminish or reduce in the amounts you can put into these accounts. This option has been mentioned too in the past.

[Ocelot II]

4. Nothing is getting confiscated.

The discussion is about whether the tax advantages of these plans should be repealed.

[doc03]

6. Second paragraph. They propose (abolishing) tax sheltered plans like 401K

Last edited Thu May 9, 2024, 08:14 AM - Edit history (1)

and IRAs to bolster SS. If you eliminate the tax break for a 401k and an IRA you are in
effect eliminating the 401k and IRA. What would be the point of having a 401k or IRA
without the tax break. It is not a tax break, it is a tax deferment, you pay when you withdraw.
It would be no different than putting your money in a savings account or the Wall Street casino.

[Ocelot II]

9. Abolishing isn't confiscating.

Your existing plan wouldn't be taken from you; new plans with the tax advantages of existing plans would no longer be offered. That's not confiscation.

[doc03]

11. It doesn't say abolishing the (tax benefit) it says abolishing (tax sheltered plans) like

401k and IRAs. Either way they are reneging on a promise they made to get you to invest for your retirement.
We were told you can invest in a 401k and your tax will be deferred until you withdraw. It was a plan to get
workers to put their money in Wall Street since they couldn't privatize SS.

[Scrivener7]

17. You're really fighting hard to see a disaster that simply isn't there.

You aren't going to lose your accounts.

[bucolic_frolic]

5. Hollow out people and give tax break to corporations

One of them an American Enterprise Institute guy. Conservative think tank. What do you expect?

It's a constantly warring sleight-of-hand. They tax traditional IRAs, but not Roth, except a few states for estate tax purposes, and strict rules on inheriting a Roth IRA. Some SS is taxed for higher earners post-retirement, there are some exclusions. The uncertainty and changing landscape causes people to not pay close attention, or care very much.

SS was designed for old age support - rent, heat, food, healthcare. The components of retirement costs are complex. Wealthy people have trust funds, and due to estate tax law, have loopholes to the point they really can take it with them.

It's just like the internet. We're so much safer doing things online now that every hack can locate, target, swat, swindle, loot, and compromise our private records. Major financial companies advise - check your accounts every day.

[doc03]

8. There were many of my fellow workers that would not put money in a 401k

for this exact reason. They would say you can't trust the government they will find a way to take that money.
This was a contract with the public to encourage people to save for their retirement. Yes, you get a tax break
when you put your money in but you also pay tax on the capital gains as regular income rather than the lower
Capitol Gains tax when you take it out. In addition, your income from an IRA subject your SS to tax, I paid tax
on 85% of my SS last year.

[Think. Again.]

10. SS is actually paid into by those that collect it later...

...so your fear of paying for people who didn't save is...well, weird.

[doc03]

12. I have been on SS for 14 years, I skimped and

saved to put money in my 401K so I could retire with some dignity. I pay tax on 85% of my
SS while those I worked with who didn't plan for their retirement keep all their SS. Now they propose taking the
tax break for a 401k from future retirees. If they take the tax break away they are in effect eliminating the
401k and the IRA, there would be no reason to have them it would be the same as just putting your money
in a bank account or just buying stocks.

[58Sunliner]

15. Could your headline be more misleading and alarmist?

[Happy Hoosier]

19. As many have pointed out... no confiscation. Furthermore...

I think there is zero percent chance they eliminate these programs going forward UNLESS they are replaced with a different program, or social security is actively expanded.

There is already a retirement crisis in this country, there is no chance that they make it worse with a ham-handed measure like this.