I generally don't forward political info like this, but this is big, and financial. The link below is to an article with info andd the source document stating that the US Treasury is debating annuitizing 401k's. That the Treasury is debating annuitizing 401k's is a conversation about effective socialization of your private funds - 401k's, and probably IRA's at some point too.
For those not sure what annuitizing is, you are putting in a set amount of money over a set time period, and you will get a set amount of money every month after a certain age until you die. If you don't make it to the payout date, the funds are gone. Your next of kin does not get them, gone. If you are a prodigious saver and have tripled the amount of money in your 401k by good investing and saving, that doesn't matter, because you get a set amount every month. No wild vacations to exotic locations because you did a great jub of saving, because you get a set amount of money every month. Again, any money you have made goes away upon your death. Social Security is an annuity, every paycheck you put in 5% of your income into the pool, which we all know will not have any money by the time we retire.
As it stands now, most of us can expect to not get social security based on the size of the pool and the promised benefits. A way to bridge this gap would be to take all funds currently held in private retirement accounts, and adding them into the SS pool to offset the short comings of the current promised amounts. What happens in this process, is that those who do set aside large portions of their income into 401k's, being fically smart and reducing current benefit for long-term savings, will lose that money and control over it. This will punish those who have been living within or below their means to save for the future, while those who are living beyond their means will have a bailout for poor fiscal sense.
Go look at your last 401k statement. If this passes, you can just go ahead and write that off. Think about what fun you could have had with an extra $500/month, or if you are maxing out your 401k, $1050/month. That's a new car, a few vacations to the tropics, bigger house, etc. Gone, no mas, it isn't yours anymore, don't worry the government will take care of you in the future though, that's a promise you can trust. Just like their other promises...
-Stone
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http://www.zerohedge.com/article/treasury-soliciting-your-feedback-regarding-proposed-annuitization-401k
The Treasury Is Soliciting Your Feedback Regarding The Proposed Annuitization Of 401(k)
Yes, slowly but surely it is happening. In a federal notice filed earlier, the DOL and Treasury are soliciting a response on what has been on many investors' mind, namely the process of converting 401(k)s into annuity-like products. To wit:
e-ORI@dol.gov. Include RIN 1210-AB33 in the subject line of the message
For those not sure what annuitizing is, you are putting in a set amount of money over a set time period, and you will get a set amount of money every month after a certain age until you die. If you don't make it to the payout date, the funds are gone. Your next of kin does not get them, gone. If you are a prodigious saver and have tripled the amount of money in your 401k by good investing and saving, that doesn't matter, because you get a set amount every month. No wild vacations to exotic locations because you did a great jub of saving, because you get a set amount of money every month. Again, any money you have made goes away upon your death. Social Security is an annuity, every paycheck you put in 5% of your income into the pool, which we all know will not have any money by the time we retire.
As it stands now, most of us can expect to not get social security based on the size of the pool and the promised benefits. A way to bridge this gap would be to take all funds currently held in private retirement accounts, and adding them into the SS pool to offset the short comings of the current promised amounts. What happens in this process, is that those who do set aside large portions of their income into 401k's, being fically smart and reducing current benefit for long-term savings, will lose that money and control over it. This will punish those who have been living within or below their means to save for the future, while those who are living beyond their means will have a bailout for poor fiscal sense.
Go look at your last 401k statement. If this passes, you can just go ahead and write that off. Think about what fun you could have had with an extra $500/month, or if you are maxing out your 401k, $1050/month. That's a new car, a few vacations to the tropics, bigger house, etc. Gone, no mas, it isn't yours anymore, don't worry the government will take care of you in the future though, that's a promise you can trust. Just like their other promises...
-Stone
---------------------
http://www.zerohedge.com/article/treasury-soliciting-your-feedback-regarding-proposed-annuitization-401k
The Treasury Is Soliciting Your Feedback Regarding The Proposed Annuitization Of 401(k)
Yes, slowly but surely it is happening. In a federal notice filed earlier, the DOL and Treasury are soliciting a response on what has been on many investors' mind, namely the process of converting 401(k)s into annuity-like products. To wit:
A cursory read of the document does not seem to ask about a flat out regulatory requirement for annuitization. We point your attention to item 13:The Department of Labor and the Department of the Treasury (the "Agencies") are currently reviewing the rules under the Employee Retirement Income Security Act (ERISA) and the plan qualification rules under the Internal Revenue Code (Code) to determine whether, and, if so, how, the Agencies could or should enhance, by regulation or otherwise, the retirement security of participants in employer-sponsored retirement plans and in individual retirement arrangements (IRAs) by facilitating access to, and use of, lifetime income or other arrangements designed to provide a lifetime stream of income after retirement. The purpose of this request for information is to solicit views, suggestions and comments from plan participants, employers and other plan sponsors, plan service providers, and members of the financial community, as well as the general public, on this important issue.
For readers who feel compelled to respond to this increasignly socialistic and ludicrous development, we suggest you voice your anger at the following address:13. Should some form of lifetime income distribution option be required for defined contribution plans (in addition to money purchase pension plans)? If so, should that option be the default distribution option, and should it apply to the entire account balance? To what extent would such a requirement encourage or discourage plan sponsorship?
e-ORI@dol.gov. Include RIN 1210-AB33 in the subject line of the message