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US may need new retirement savings plans, lawmaker says

Discussion in 'Political Zone' started by DIAF, Mar 3, 2009.

  1. DIAF

    DIAF DivaLover159

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    http://www.reuters.com/article/companyNews/idUSN2440922220090224?rpc=11

    I don't usually start threads or post articles, but this one pertains directly to my line of work. How in the world can someone be the chairman of the House Education and Labor Committee and know jack crap about Defined Contribution plans? (see the bolded part). Let me go ahead and say that before this turns into a "its because he's a (D)"-fest, Republicans when they were chairing committees seemed to be equally clueless....wouldn't it be great if they actually appointed individuals to these committees based on expertise and merit, and not seniority or as some kind of reward?

    "If you didnt take your money out of the market" - yeah, that's a great idea. In the middle of bad economic times, why don't I take my money out, take the 20% (more if you count state taxes too) tax hit, and then get back in when things are better and the market has gone up! Great strategy!

    "take years to recoup your losses, if ever" - hey genius, 401ks are long-term investments. This ain't day trading.

    "high stakes crap-shoot" - only if you are an idiot. There's always stable value, Bond, or Money Market Funds you can go to avoid volatility.

    "root out hidden fees that are eating up much of worker's savings" - in a 401k plan? What evil hidden fee is he talking about? The optional fees, such as the oh-so debilitating Loan Fee (typically 50 dollars), the Insane 2% Redemption fee, or the QDRO (divorce) fee? Avoidable fees that are typically very low? Or does he mean the plan administration fees that are charged against the entire plan pool? What an idiot.

    "we need a new mandatory investment vehicle" - Yeah, what he means is the government needs another way of getting your money. Now, I'm not against paying taxes like some of our other more, uhm, angry posters on this board but I don't need you taking more of my retirement savings. It's bad enough I can only put away 16500 before-tax in a year in my 401k. Now you want to create a new, mandatory investment vehicle that you can tax, and will cripple participation in DC plans? Americans already don't save enough for retirement as it is.

    If George Miller is your representative in the House, please vote him out.

    Also, times are bad. The dow is down to 6700, and everything has nose-dived. If you have a 401k, id max that thing out, baby. Contribute as much as you can. Right now, everything is basically on sale. It's like Black Friday for your 401(k).
  2. trickblue

    trickblue Old Testament... Zone Supporter

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    I do know that some Democrats entertained an "expert" in a proposal in favor of establishing a government retirement system...

    Her plan was basically that 401k's would be done away with. The money would then go into the government coffers where each individual would be required to invest 3% of their income a month and the government would contribute $600 per year.

    It's posted somewhere in this forum. Let's hope he isn't laying the groundwork for a plan like this...

    EDIT: Here it is...

    http://cowboyszone.com/forums/showthread.php?t=135049
  3. DIAF

    DIAF DivaLover159

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    Yeah, that was some "expert" that was just asked to speak in front of a panel. Her idea would never fly, it was so out there. You have to remember; although politicians like money like the rest of us do, they can't get their hands on it if they piss you off too much and you vote them out of office.

    Edit: Looking back at that thread, wow, there is some horrible advice there.

    This might be some of the worst advice ever given on these boards. And yes, Maikeru, you ARE crazy. I can only hope you didn't do that.
  4. trickblue

    trickblue Old Testament... Zone Supporter

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    Teresa Ghilarducci: In my new book I propose a practical reform of the private pension system -- a mandated savings program called Guaranteed Retirement Accounts. The federal government subsidizes each account with an annual grant of $600; workers and employers share the rest of the cost equal to 5-percent-of-pay contribution (up to the Social Security cap). The federal government pays a guaranteed 3% rate of return ABOVE inflation , which with Social Security provides, on average, 70 percent of pre-retirement earnings. The $600 refundable tax credit costs nothing if we eliminate most of the tax breaks for 401(k)s and IRAs. We can keep tax breaks for contributions up to $5,000 per year, and lower the grant to $400 per year. I am grateful to the WURF Fellowship at the Labor and Worklife Program at the Harvard Law School and the Rockefeller Foundation for their support.
  5. DIAF

    DIAF DivaLover159

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    Yeah, eliminating the tax incentives for 401ks and IRAs. Wonderful idea there. Good thing that's not ever going to happen.
  6. trickblue

    trickblue Old Testament... Zone Supporter

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    Let's hope you're spot on!
  7. ShiningStar

    ShiningStar Well-Known Member

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    First, im going to say I think Diaf didnt like the article and found the person a moron. Second when and if I get a 401 or what have you, I think ill PM him for some sound advice.
  8. iceberg

    iceberg detoxed Zone Supporter

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    is this another example of being dependant on the government because privately we can't get it right?

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