Crazy? Maybe, Maybe Not

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Oct 27, 2008 3:42 pm

I have a former associate who tells me that House and Senate staffers have been
talking to Wall Street insiders about developing a common strategy to merge
private sector retirement plans with the Social Security system.

  This was done recently in Argentina--government just took the pension
plans. The possibility that this could happen here caused my friend and I to
discuss how to stay ahead of the power curve. He suggested that paying a 10% penalty for premature withdrawal is
certainly favorable to losing the entire account--there's no way to argue with
that. He also suggested that paying taxes at 2008 rates would be favorable to
paying taxes at any rate in the coming years.   That what we pay for taxes in
2008 will probably be the lowest rate for the rest of our lives--regardless of
how young anybody is. So he is opining that the surest way to preserve wealth in the coming Age
of Obama is to not own a retirement plan--and to get out of them now.  He
further believes that no matter how onerous the tax ramifcations of an early
withdrawal are they are still favorable to waking up one morning to hear that
the evil troica of Obama, Pelosi and Reid orchestrated an overnight seizure of
all retirement plans. There are twenty million stories in The Naked City.  This has been one of
them.
Oct 27, 2008 4:38 pm

Were you just looking for our feedback before you submitted this to the National Enquirer?

Oct 27, 2008 4:40 pm
HymanRoth:

Were you just looking for our feedback before you submitted this to the National Enquirer?

 
Meth can definitely make people do some odd things...
Oct 27, 2008 6:43 pm
snaggletooth:
HymanRoth:

Were you just looking for our
feedback before you submitted this to the National Enquirer?

 
Meth can definitely make people do some odd things...





So, do you think that seizing retirement plans cannot happen, or are you simply not wanting to think about it?

Oct 27, 2008 6:52 pm

I don't agree with a lot of what Put says on these boards, but I think he is spot on with this sort of thinking.  A mandatory 5% contribution to the government-run retirement plan?  All the government is doing is deferring a huge payment to themselves.  401ks and other qualified plans are simply one of the biggest tax traps ever invented.  And they have full control over how they are administered. 

 
There is nothing in the tax code that states they cannot change the mandatory retirement age.  There is nothing in the tax code that states they cannot create another excise tax on withdrawals from plans over a certain dollar amount.  What the government has done is ensure they can change the rules whenever they want (and usually to their, as opposed to the people's) benefit.
Oct 27, 2008 6:53 pm
Provocative Put:
snaggletooth:
HymanRoth:

Were you just looking for our feedback before you submitted this to the National Enquirer?

 
Meth can definitely make people do some odd things...



So, do you think that seizing retirement plans cannot happen, or are you simply not wanting to think about it?

 
Do I think it can happen?  I guess anything is possible.
Do I not want to think about it?  Absolutely.
 
I can't do anything about it.  I have no control over it.  I just do what is best with what I've got today. 
Oct 27, 2008 8:15 pm

Imagine what would happen if 59.5 was now 62 or 64 or 65.  The govies could easily force early retirees to work a few extra years before tapping their retirement (without penalty).  This would add billions to the SS coffers and keep people contributing to 401K's during their highest earning years. 

Oct 28, 2008 11:18 am

I could see that argument happening for one simple reason: Fewer and fewer bodies to take the place of the retiring workforce.  Think about it...you have this tremendous amount of people starting to head into "retirement years" and fewer people to replace.  What will the ave business do to attract fewer employees, raise wages.

I could see businesses lobbying for later retirement for their best workers AND having a way to rid themselves of the large 401k liability.  They DON'T like having retirement plans that expose them to lawsuits. This will be the next lawsuit craze, sue IBM because they didn't do enough to make sure you made all the right decisions in your 401k and when you thought running those hypos with 12% returns would net you 1mil by retirment and it is just 330k...who is going to make up the gap...IBM...thats who. 
Oct 28, 2008 11:28 am

Put is absolutely right. 

 

So he is opining that the surest way to preserve wealth in the coming Age of Obama is to not own a retirement plan--and to get out of them now.  He further believes that no matter how onerous the tax ramifcations of an early withdrawal are they are still favorable to waking up one morning to hear that the evil troica of Obama, Pelosi and Reid orchestrated an overnight seizure of all retirement plans.
 
This is already happening in Argentina. 
 
On a personal level, I'm about ready to throw in the towel and retire.  I'm sick about what is happening to our country, the comming socialist regime and tired of being the Little Dutch Boy trying to plug up the holes in a ever changing regulatory and punitive environment.  I'll probably hang in for another year or so, but I see "a bad moon arising" .   Really really bad.
Oct 28, 2008 12:06 pm
babbling looney:

Put is absolutely right. 

 

So he is opining that the surest way to preserve wealth in the coming Age of Obama is to not own a retirement plan--and to get out of them now.  He further believes that no matter how onerous the tax ramifcations of an early withdrawal are they are still favorable to waking up one morning to hear that the evil troica of Obama, Pelosi and Reid orchestrated an overnight seizure of all retirement plans.
 
This is already happening in Argentina. 
 
On a personal level, I'm about ready to throw in the towel and retire.  I'm sick about what is happening to our country, the comming socialist regime and tired of being the Little Dutch Boy trying to plug up the holes in a ever changing regulatory and punitive environment.  I'll probably hang in for another year or so, but I see "a bad moon arising" .   Really really bad.
 
Pardon my ignorance, but has there ever been a political leader or president as socialistic in the U.S. as what everyone here thinks we will be getting? 
Oct 28, 2008 12:08 pm

NO.  Obama takes the cake.

Oct 28, 2008 12:14 pm
bspears:

I could see that argument happening for one simple reason: Fewer and fewer bodies to take the place of the retiring workforce.  Think about it...you have this tremendous amount of people starting to head into "retirement years" and fewer people to replace.  What will the ave business do to attract fewer employees, raise wages.

I could see businesses lobbying for later retirement for their best workers AND having a way to rid themselves of the large 401k liability.  They DON'T like having retirement plans that expose them to lawsuits. This will be the next lawsuit craze, sue IBM because they didn't do enough to make sure you made all the right decisions in your 401k and when you thought running those hypos with 12% returns would net you 1mil by retirment and it is just 330k...who is going to make up the gap...IBM...thats who
 
I think we may see another "tipping point" in pension law coming soon, precisely for the reason above.  After this bloodbath, and 10-year sideways market, I think lawmakers and pension experts are going to start questioning the conventional "new" wisdom that individuals can manage their own retirement portfolios.  Despite all the warnings and education and tools available to 401K participants, most still just do their own thing - either way too conservative (like all in the "fixed" bucket) or way too aggressive (like all company stock or just picking all the smoking funds from last year).
 
But what is even scarier, is that I have helped many clients balance their 401K's, and they still just got hammered (although they would have done fine through 2000-02).
 
Oct 28, 2008 12:17 pm

I've been a political junkie for many years and I can't remember a worse candidate, other than maybe Jimmy Carter.  As I've told many people, Obama will take us down a path we have NEVER experienced before.  This will cause turmoil to our system on an unbelievable scale...THe socialist are becoming more free market and we are moving to a socialist model....heaven help us...blood will be shed...I can see the countries who HATE us licking their chops...ready to jump on us...to destroy our way of life...If his policies affect any industry..ours would have to be one that has the most to lose.  We make great money, our clients like lower capital gains and 401k rollovers are our gold mines...

Oct 28, 2008 12:33 pm
bspears:

I've been a political junkie for many years and I can't remember a worse candidate, other than maybe Jimmy Carter.  As I've told many people, Obama will take us down a path we have NEVER experienced before.  This will cause turmoil to our system on an unbelievable scale...THe socialist are becoming more free market and we are moving to a socialist model....heaven help us...blood will be shed...I can see the countries who HATE us licking their chops...ready to jump on us...to destroy our way of life...If his policies affect any industry..ours would have to be one that has the most to lose.  We make great money, our clients like lower capital gains and 401k rollovers are our gold mines...

 
I'd like to be a little more optimistic.  Isn't it possible that everyone has gotten the Y2K scare over Obama?  Might he change his course to a more mainstream view once elected?  Wouldn't some of the "smarter", more senior Democrats curtail the more socialistic ideas of Obama?  There has to be some sensible Democrats...they aren't all socialists.
 
 
Oct 28, 2008 12:34 pm

I was talking to a friend who works inside the beltway for Nat'l Science Foundation and they are really worried that an an inner galactic SGR (soft gamma repeater) may go neutron star on us with a highly destructive GRB (Gamma Ray Burst). Apparently, according to my friend, the probability of this happening is inversely proportional to the republicans losing the executive branch in 2008. He said their observations have caused them to go to condition orange. They are even moving the plants inside! He said this trumps any concerns he had about Palin not even believing in GRBs. He's voting for McCain.

Oct 28, 2008 12:36 pm
BondGuy:

I was talking to a friend who works inside the beltway for Nat'l Science Foundation and they are really worried that an an inner galactic SGR (soft gamma repeater) may go neutron star on us with a highly destructive GRB (Gamma Ray Burst). Apparently, according to my friend, the probability of this happening is inversely proportional to the republicans losing the executive branch in 2008. He said their observations have caused them to go to condition orange. They are even moving the plants inside! He said this trumps any concerns he had about Palin not even believing in GRBs. He's voting for McCain.

 
You have some weird friends...
Oct 28, 2008 12:36 pm

FDR and the New Deal brought the same socialist dribble from the whining losers.

Oct 28, 2008 12:44 pm
snaggletooth:
bspears:

I've been a political junkie for many years and I can't remember a worse candidate, other than maybe Jimmy Carter.  As I've told many people, Obama will take us down a path we have NEVER experienced before.  This will cause turmoil to our system on an unbelievable scale...THe socialist are becoming more free market and we are moving to a socialist model....heaven help us...blood will be shed...I can see the countries who HATE us licking their chops...ready to jump on us...to destroy our way of life...If his policies affect any industry..ours would have to be one that has the most to lose.  We make great money, our clients like lower capital gains and 401k rollovers are our gold mines...

 
I'd like to be a little more optimistic.  Isn't it possible that everyone has gotten the Y2K scare over Obama?  Might he change his course to a more mainstream view once elected?  Wouldn't some of the "smarter", more senior Democrats curtail the more socialistic ideas of Obama?  There has to be some sensible Democrats...they aren't all socialists.
 
Sure, this is certainly possible and I expect that before four years are past, we'll find a fairly normal course of running the country.  After all, at least most of the 435 members of congress are probably interested in re-election.  Don't be surprised to see some negative (at least economically) legislation at the beginning of the next term as various social programs are introduced, and more bailouts are handed out, but eventually, the sheer numbers will force the government to revert to the mean.  My advice is to ride this out.  Like any other cycle, it won't last forever.
Oct 28, 2008 12:45 pm
BondGuy:

I was talking to a friend who works inside the beltway for Nat'l Science Foundation and they are really worried that an an inner galactic SGR (soft gamma repeater) may go neutron star on us with a highly destructive GRB (Gamma Ray Burst). Apparently, according to my friend, the probability of this happening is inversely proportional to the republicans losing the executive branch in 2008. He said their observations have caused them to go to condition orange. They are even moving the plants inside! He said this trumps any concerns he had about Palin not even believing in GRBs. He's voting for McCain.



I am sure you have your DVR ready to tape the half hour Obama info commercial tomorrow night.  Obama needs to keep up the propaganda because of all the free propaganda that the MSM is giving him isn't enough to punch it in the end zone.  Now he wants people to take the day off next Tuesday to vote...Take the day off...it takes 5 minutes to vote.  Seems like something they do in Socialist countries. 

We are in for a huge mess with these clowns in charge.  (Obama, Biden, Frank, Pelosi, Dodd, Dean and God forbid...Al Franken).   

Oct 28, 2008 1:02 pm

Babs, you are way over the top on this. The country not only survived the most socialist leader in modern times, FDR, it thrived. You are looking at this the wrong way. Just think of  how you can spend that check that Mr. Obama will be sending you.

 
 Seriously, where you see nothing but "Bad moons", I see opportunity. If nothing else rebalance, take some loses, and DCA back in.
 
All this is temporary, soon we'll be in a new day. New day, new crisis, new opportunity.