Friday, April 26, 2013

Now The Government Wants Your 401K!

What the government wants to do is to do away with your 401K...and let THEM handle it. They say it's costing you more money than what you're getting because of rising management fees of your 401K. So, to save you money, the government wants to buy your 401K at the price it would have been worth just a month or two before the market crash in 2008 and then give you a measly 1-3% interest on it. Oh yes! I want my government to manage my retirement fund because they've done SUCH a great job with the other one, called Social Security!!!

The real reason the government wants to do this is because they say they are losing money with our 401K's. How? Because the money you put in, goes in before it is taxed. So let's say you earn $900.00 a week, and have $100.00 put into your 401K weekly. That $100.00 goes in first, and then you're taxed on the remaining $800.00. So, the government figures they are losing money because that $100.00 wasn't taxed. But, what they aren't taking into consideration is that that $100.00 WILL be taxed when you go to finally use it when you retire! In fact, After the age of 70-1/2, you MUST start taking money out in at least minimal amounts annually, determined by IRS actuarial tables depending on your age. This is called your Required Minimum Distribution, or RMD. The penalty for not withdrawing as much as the IRS says you should is 50% of the difference between the RMD and what you actually took out.

What greed! The government isn't losing out on the money, they're just not satisfied to have to wait for it!!! And we ALL know exactly how well our government has managed our tax monies (to the tune of a $16,808,240,386,273 debt!) to date! They have stolen and mismanaged our Social Security funds to the tune that we baby boomers most likely won't get the full amount we planned on for our golden years. Do we really want our government managing our 401K's? I say that they can WAIT for their taxes on our 401K accounts and find the money they say they are losing by waiting for it by lowering the amount they pay each US senator and representative by 25%!

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