Quote:
Originally Posted by Paul F
Thanks for the education guys. Low capital gains is one of the few tax loopholes I can take advantage of as I approach retirement. So I'm all infavor of it. The idea of raising it as a way to tax the rich is shortsighted. Most retirees rely on it.
Bloody heck. I thought CDC was kidding with the 401K item. That's frightening.
|
Some more input......
Workforce Management
October 16, 2008
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal.
At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.
Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
_____
Therefore, the government will (as it does with SS) manage your mandatory retirement funds if this happens. A 3% annual return will not make it.
On the other hand, those who don't take care of retirement business during the earning years require some sort of mandatory plan as millions end up and will end up on a government program in retirement or before - simply because they tend to spend all their funds and, in the end, we end up having to cover that bad habit.
Hybrid Mode
