Friday, April 10, 2009

What's next for our DC Lifers?

That donation we've all been making into retirement accounts since our very first paycheck isn't worth much these days. The so called "trust fund" our trusted government was putting our donation into is bust....because they've been raiding it to pay for their own pet projects. You may know this donation as the Social Security Tax.

About the time our DC Lifers realized that the account was bust, they also realized that their population control (the world is overpopulated, everyone should only have 1.2 children...all others should be prevented by birth control or aborted) had sort of backfired on them....there were way more baby boomers about to retire then there was young workers to continue to support the promised retirement funds for those same baby boomers.

So what did they do next? They decided that they'd encourage us to put money into an IRA for our retirement to supplement that so called security we've been paying for since we were 15 or 16 years old. Oh, there were some tax incentives thrown in there but most Americans couldn't afford to slap too much money into those IRA's because they needed their money to live on now.

And when most of America hadn't decided that an IRA was the way to go, they came up with the 401k plans where if you were really lucky, your employer got a tax incentive to match up to a certain point what you were putting into the additional tax incentive of being able to pay the taxes when you withdrew the money instead of as you earned it.

But, hey, that hasn't worked either the way our DC Lifers had planned for it to work. And on top of that, their promises to "fix" social security before the baby boomers began to retire in force never was followed up on. AND on top of that, we now have a stock market crash that impoverished a whole bunch of those retiring boomers....said boomers are in some cases having to go back into the work force because of that loss of retirement income.

So what's the latest that our DC Lifers are contemplating? Creating a new form of retirement savings....and possibly making it mandatory for all workers...! If you choose to participate, you are required to put 5% of your annual salary into that account and earn only 3% on it. Oh you can stick with your IRA or your 401K or both of them if you want to, but their contemplations include taking away all the tax incentives for you to do order to make it more attractive to put your retirement money into their new scheme then the old ones. That sort of reminds me of ....wait a minute.....extortion! Oh, but you'll still have to pay into Social Security don't you know....even though it's a busted account.

Oh and guess what? You know how when you invest in a 401K you can choose the stocks you want to invest in so you can have some semblance of control over how your money grows? Well, this new scheme will be in bonds that will only have a 3% growth.

I'll grant you that 3% guaranteed sounds better then risky stock market investing at the moment but what about when the market recovers? Their answer? Well, you can still choose to invest in your IRA or your 401k as well as the new GRA (Guaranteed Retirement Account)...but of course without the tax incentives that used to go along with it. Oh and will you be able to take a loan out of the GRA like you can your 401K? NOPE. They'll have your money to use to spend just like they've done the Social Security Trust Fund and give you a 3% interest rate of growth for the privilege. Can you take the money and use it any way you want to when you retire? Nope again, they'll dole it out to you in bits and pieces.

And don't forget our Miss Nancy......wont' this new little scheme fit right in with her plans to tax you on the profits that you make on your 401K? Remember this....

'We need to raise the standard of living of our poor, unemployed and minorities. For example, we have an estimated 12 million illegal immigrants in our country who need our help along with millions of unemployed minorities. Stock market windfall profits taxes could go a long way to guarantee these people the standard of living they would like to have as 'Americans'.'

So if you choose to keep your money in an account where you control how it grows and how you use it when you retire....our Nancy would be more then willing to tax you on your profits at a higher rate than the amount you actually paid into would be taxed (your so called "windfall" from the fact that you controlled you money rather than let the government control it for you).

Although a lot of bloggers out there believe that this will lead to an eventual confiscation of our 401k's and IRA's, according to this just isn't true. In fact, the lady responsible for putting forward this idea for the contemplation of our DC Lifers had this to say about it "It is utterly ridiculous [to suppose] that I advocate seizing 401k assets."

Well, Teresa....maybe its "utterly ridiculous" to suppose you advocate it, but not so ridiculous to suppose that our Nancy and her ilk wouldn't soon go that route....

Teresa also said this: "If people put money into 401(k)s they could keep it there, and taxes would continue to be deferred until withdrawn. It is unthinkable that Congress would take a tax break away for activities already undertaken."

Wait a minute.....I'm not so sure about that in light of what our Nancy already stated as her intent. Furthermore, our Congress is the same bunch that signed a bill into law that allowed bonuses to be paid out of taxpayer bailout money and then decided after the fact and against the constitution of these United States, to tax that money at 90%.....isn't it?

Oh, one more thing.....should the GRA come into reality, Teresa says a "$600.00" tax incentive" should be given to encourage folks to invest in them....which folks? The ones who don't owe any taxes anyway.....And that $600.00 tax incentive will be paid for by...guess what? " taking away the deductibility of money put into an IRA or 401(k) over $5,000 per individual, per year...."! There they go again, taking from the tax payer to give to the non tax payer....

I understand the need to give workers more options, but the scary thing about this is that the suggestion was to "force" American workers to pay into this thing and if you do that without "swapping" your 401K and IRA funds into the GRA, you'd lose your tax incentives for those accounts.

And, why should we trust this government of ours to actually do what they said they'd do? They've failed to take care of the Alternative Minimum Tax situation, they've failed to figure out how to save Social Security, they've failed to improve our education and health systems despite ever increasing tax payer funding into those programs.

I think its way past time for these DC Lifers to go back home. And perhaps they could help the common man and woman by giving back their life time pensions that they get after serving only one term in office....perhaps they should do away with the bonuses they pay their staff for talking to the lobbyists (that they all so despise ...supposedly).

So, let's go to a Tea Party....let's photocopy tea bags and send them to the White House and to our Representatives and Senators and lets vote every single one of the DC Lifers out in 2010 and 2012. The only way they'll hear us if we send a whole bunch of them home....let's start by praying that California will wake up and send our Nancy packing.....


  1. Thanks for that, just what I needed kind of. fidelity 401k and Yes, it's cool, and useful for me

  2. You're welcome...I think. I'm not too certain of what it is you "needed sort of"? A warning of the future? Or to be forced by the government to save 5% of your annual income and to help force others to save by helping to pay for it for them through the loss of your tax incentives or future profits? Just need clarification :)

    Anyway, thanks for visiting.


Leave a comment.....!


Related Posts Widget for Blogs by LinkWithin