Obama and nationalizing 401K plans....

[thespeakerbox]

Some co workers have gone nuts over this, and I cant find any facts, just left wing bloggers going insane.

From what i hear, Obama plans to take existing 401k money to fund a government program or similar to save social security.

Anyone know any facts about the matter?

 

[Thump553]

BS rumor.

Argentina did that a few weeks ago with disasterous results. We are not a South American republic.

 

[Genx87]

I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

 

[IronWing]

Originally posted by: Genx87
I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

Apples and oranges. 401ks are retirement accounts, SS in an insurance program. Folks tend to forget that when comparing SS returns to stock market returns. They are two different animals. When's the last time you heard someone complain about the return on their auto insurance? Note that I don't support the idea of a TSP for all program.

 

[StageLeft]

Some dems come up with a plan and suddenly it's a day one task for Obama, right?

 

[StageLeft]

Originally posted by: ironwing

Originally posted by: Genx87
I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

Apples and oranges. 401ks are retirement accounts, SS in an insurance program. Folks tend to forget that when comparing SS returns to stock market returns. They are two different animals. When's the last time you heard someone complain about the return on their auto insurance? Note that I don't support the idea of a TSP for all program.

They spin it as insurance, but the fact is insurance is for something I am not sure I'll ever need, I'm pretty damn sure I'll need to retire.

 

[ElFenix]

Originally posted by: ironwing

Originally posted by: Genx87
I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

Apples and oranges. 401ks are retirement accounts, SS in an insurance program. Folks tend to forget that when comparing SS returns to stock market returns. They are two different animals. When's the last time you heard someone complain about the return on their auto insurance? Note that I don't support the idea of a TSP for all program.

SS is not an insurance program. it was sold as that originally but it is no longer one. it's a forced savings account at a crappy rate that you may not have access to if congress changes its mind.

 

[Xavier434]

Originally posted by: ElFenix

Originally posted by: ironwing

Originally posted by: Genx87
I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

Apples and oranges. 401ks are retirement accounts, SS in an insurance program. Folks tend to forget that when comparing SS returns to stock market returns. They are two different animals. When's the last time you heard someone complain about the return on their auto insurance? Note that I don't support the idea of a TSP for all program.

SS is not an insurance program. it was sold as that originally but it is no longer one. it's a forced savings account at a crappy rate that you may not have access to if congress changes its mind.

We need a minimal risk plan for everyone or else you will be facing lots of problems for retired people whose risky investments fail. We need to fix SS, but we shouldn't privatize it. Unfortunately that means the returns will be small, but I am ok with that because I like having back up plans and I can make my own risky investments myself if I want more money for when I retire.

 

[quest55720]

There was a thread on this issue a few days ago. The whole issue scares me to death honestly. This government is already stealing thousands from me a year in SS that I will never see because they bankrupted it with out of control spending. The minute this type of legislation passes I pull my money out of my 401k I don't care about penalties. I would rather pay a penalty than to see this government steal more of my money.

 

[spidey07]

It wouldn't be surprising given all his beliefs if he supported this growing movement in the house.

Yeah! That's a great idea! We're giving those rich people all these tax breaks with a 401k, let's take that too!

 

[Xavier434]

Originally posted by: spidey07
It wouldn't be surprising given all his beliefs if he supported this growing movement in the house.

Yeah! That's a great idea! We're giving those rich people all these tax breaks with a 401k, let's take that too!

File this under speculation driven by nothing but fear and anger Bob.

 

[soccerballtux]

Originally posted by: Genx87
I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

Funny the government workers don't even pay into social security. You're right, they pay into the thrift program. It's much better than SS.

 

[StageLeft]

Originally posted by: Xavier434

Originally posted by: ElFenix

Originally posted by: ironwing

Originally posted by: Genx87
I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

Apples and oranges. 401ks are retirement accounts, SS in an insurance program. Folks tend to forget that when comparing SS returns to stock market returns. They are two different animals. When's the last time you heard someone complain about the return on their auto insurance? Note that I don't support the idea of a TSP for all program.

SS is not an insurance program. it was sold as that originally but it is no longer one. it's a forced savings account at a crappy rate that you may not have access to if congress changes its mind.

We need a minimal risk plan for everyone or else you will be facing lots of problems for retired people whose risky investments fail. We need to fix SS, but we shouldn't privatize it. Unfortunately that means the returns will be small, but I am ok with that because I like having back up plans and I can make my own risky investments myself if I want more money for when I retire.

OK, but the returns are damn near zero right now because if you have a savings account and put money in it and then your wife immediately pulls it out to buy shoes, what sort of return did you make? Since the money I put into SS is used up NOW, that's basically what's happening, which is why the return is so low. There are other government backed investments with better returns and every bit as much security, since they're backed by the gov just as SS is.

 

[Genx87]

Originally posted by: ironwing

Originally posted by: Genx87
I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

Apples and oranges. 401ks are retirement accounts, SS in an insurance program. Folks tend to forget that when comparing SS returns to stock market returns. They are two different animals. When's the last time you heard someone complain about the return on their auto insurance? Note that I don't support the idea of a TSP for all program.

SS is an entitlement program. If it were an insurance program it would require one to qualify for its benefits. The only qualification is age. And what besides disability does it insure?

 

[Genx87]

Originally posted by: Xavier434

Originally posted by: ElFenix

Originally posted by: ironwing

Originally posted by: Genx87
I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

Apples and oranges. 401ks are retirement accounts, SS in an insurance program. Folks tend to forget that when comparing SS returns to stock market returns. They are two different animals. When's the last time you heard someone complain about the return on their auto insurance? Note that I don't support the idea of a TSP for all program.

SS is not an insurance program. it was sold as that originally but it is no longer one. it's a forced savings account at a crappy rate that you may not have access to if congress changes its mind.

We need a minimal risk plan for everyone or else you will be facing lots of problems for retired people whose risky investments fail. We need to fix SS, but we shouldn't privatize it. Unfortunately that means the returns will be small, but I am ok with that because I like having back up plans and I can make my own risky investments myself if I want more money for when I retire.

What exactly is wrong with utilizing the current welfare system?

 

[IronWing]

Originally posted by: soccerballtux

Originally posted by: Genx87
I dont know if this is an Obama plan. However a democrat senator was talking about a plan to move people onto a program like Federal Thrift plan. There was a thread about it maybe 3 weeks ago.

I laughed my fucking ass off at it as well since that is exactly what many on the right have been advocating as a replacement for the current SS system. They pissed and moaned about doing any kind of privatizing of the system then change their mind when a democrat majority + democrat president will be in power.

Funny the government workers don't even pay into social security. You're right, they pay into the thrift program. It's much better than SS.

This partially incorrect. Federal workers hired since ~1983 pay into SS and have the option of investing in the TSP. Workers hired before 1983 do not pay into SS but have a separate pension program plus the option of investing in the TSP.

 

[spidey07]

Originally posted by: Xavier434

Originally posted by: spidey07
It wouldn't be surprising given all his beliefs if he supported this growing movement in the house.

Yeah! That's a great idea! We're giving those rich people all these tax breaks with a 401k, let's take that too!

File this under speculation driven by nothing but fear and anger Bob.

You're calling a push by Barney Frank speculation? Given all that Obama stands for it surely is not speculation. Very educated, likely true guess would be more appropriate.

 

[IronWing]

Originally posted by: Genx87
SS is an entitlement program. If it were an insurance program it would require one to qualify for its benefits. The only qualification is age. And what besides disability does it insure?

This is incorrect. To recieve SS retirement benefits one needs at least 40 quarters of qualifying employement. Disability/widow/orphan benefits.

 

[Xavier434]

Originally posted by: Skoorb
OK, but the returns are damn near zero right now because if you have a savings account and put money in it and then your wife immediately pulls it out to buy shoes, what sort of return did you make? Since the money I put into SS is used up NOW, that's basically what's happening, which is why the return is so low. There are other government backed investments with better returns and every bit as much security, since they're backed by the gov just as SS is.

I agree with you. I think those problems need to be fixed so we can get back on track with SS.

Originally posted by: Genx87

Originally posted by: Xavier434
We need a minimal risk plan for everyone or else you will be facing lots of problems for retired people whose risky investments fail. We need to fix SS, but we shouldn't privatize it. Unfortunately that means the returns will be small, but I am ok with that because I like having back up plans and I can make my own risky investments myself if I want more money for when I retire.

What exactly is wrong with utilizing the current welfare system?

What is wrong with SS if it is being used as intended?

I agree more with Skoorb here. There are problems with SS and how it is being used. We need to fix those problems. I am not informed enough to answer your question directly with proper justification, but dumping the responsibility of SS on to another already broken system like welfare sounds like a really bad idea to me.

 

[Xavier434]

Originally posted by: spidey07

Originally posted by: Xavier434

Originally posted by: spidey07
It wouldn't be surprising given all his beliefs if he supported this growing movement in the house.

Yeah! That's a great idea! We're giving those rich people all these tax breaks with a 401k, let's take that too!

File this under speculation driven by nothing but fear and anger Bob.

You're calling a push by Barney Frank speculation? Given all that Obama stands for it surely is not speculation. Very educated, likely true guess would be more appropriate.

Incorrect. Given all that you think Obama stands for it may not be speculation, but you are wrong about that too and even if you are correct it is still nothing more than speculation and borderline fear mongering.

 

[ProfJohn]

He is NOT going to nationalize them, that would be a disaster of epic nature. After that the Democrats would never win another race in 20+ years. It would essentially amount to the government stealing the money from everyone with a 401k.


What they MAY do though is tax peoples 401k in ways they have not been taxed before. 401k are tax free to some degree and they could take that away. Or if they got bold, and crazy, they could go after past gains that were not taxed. But again, that would be a death blow to the party.

Think about this... in 1993 Democrats passed a tax increase that was retroactive back to the first of that year and there was HUGE outrage and lawsuits over it. Now imagine they try passing a bill to tax 401k gains seen in prior YEARS. People would go nuts over it.

 

[Genx87]

Originally posted by: Xavier434

Originally posted by: Skoorb
OK, but the returns are damn near zero right now because if you have a savings account and put money in it and then your wife immediately pulls it out to buy shoes, what sort of return did you make? Since the money I put into SS is used up NOW, that's basically what's happening, which is why the return is so low. There are other government backed investments with better returns and every bit as much security, since they're backed by the gov just as SS is.

I agree with you. I think those problems need to be fixed so we can get back on track with SS.

Originally posted by: Genx87

Originally posted by: Xavier434
We need a minimal risk plan for everyone or else you will be facing lots of problems for retired people whose risky investments fail. We need to fix SS, but we shouldn't privatize it. Unfortunately that means the returns will be small, but I am ok with that because I like having back up plans and I can make my own risky investments myself if I want more money for when I retire.

What exactly is wrong with utilizing the current welfare system?

What is wrong with SS if it is being used as intended?

I agree more with Skoorb here. There are problems with SS and how it is being used. We need to fix those problems. I am not informed enough to answer your question directly with proper justification, but dumping the responsibility of SS on to another already broken system like welfare sounds like a really bad idea to me.

Besides the obvious being it is a blanket program that is doomed to failure due to demographics?

A welfare like system would serve us better. Make people qualify for benefits.

 

[Genx87]

Originally posted by: ironwing

Originally posted by: Genx87
SS is an entitlement program. If it were an insurance program it would require one to qualify for its benefits. The only qualification is age. And what besides disability does it insure?

This is incorrect. To recieve SS retirement benefits one needs at least 40 quarters of qualifying employement. Disability/widow/orphan benefits.

Answer the second part, what exactly besides disability does it insure exactly?

 

[IronWing]

Originally posted by: ProfJohn
He is NOT going to nationalize them, that would be a disaster of epic nature. After that the Democrats would never win another race in 20+ years. It would essentially amount to the government stealing the money from everyone with a 401k.


What they MAY do though is tax peoples 401k in ways they have not been taxed before. 401k are tax free to some degree and they could take that away. Or if they got bold, and crazy, they could go after past gains that were not taxed. But again, that would be a death blow to the party.

Think about this... in 1993 Democrats passed a tax increase that was retroactive back to the first of that year and there was HUGE outrage and lawsuits over it. Now imagine they try passing a bill to tax 401k gains seen in prior YEARS. People would go nuts over it.

401ks gains (from any year) are taxed at the time of withdrawal using the income tax rate schedule in place at the time of withdrawal. For most folks, who make modest withdrawals from their 401ks each year in retirement, there will be an overall tax benefit. To folks making large withdrawals, they might have been better off investing outside of a 401k where they would pay the low capital gains rate.

 

[imported_gardener]

There is no Obama plan to take your 401k.

Some rightwing bloggers are attempting to take a comments, out of context, from an early October house committee meeting on 401ks. One of the people who testified, Prof. Teresa Ghilarduccito, recommended giving workers the option of transferring 401k savings into a government guaranteed plan. Congressmen commented on it.

The context here is that this was a discussion, and many retirees have taken sizable hits in their 401k's.

Here's a quote, excerpted from a US News and World Report story.

Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, said that since "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."

Tempest in a Teapot