Author Topic: Are 401(k)'s Safe?  (Read 4486 times)

Offline Sunshine

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Are 401(k)'s Safe?
« on: August 12, 2015, 11:25:03 AM »
This article is from last year, but it discusses the possibility of government "borrowing" some of the vast money sitting in 401(k) accounts.  It's something I've heard rumblings about off and on over the past five years or so. 

http://www.wealthdaily.com/articles/will-the-government-take-your-401k/5016

What are your thoughts, on the article's points or on the topic in general?  Does anyone have more recent information that might indicate if we'll be looking at this in the near future?

My thoughts:  never say never.  :)

Offline outoforder2day

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Re: Are 401(k)'s Safe?
« Reply #1 on: August 12, 2015, 11:59:37 AM »
Sure, never say never... But also, don't put all your eggs in one basket.
I do a 401k to the employer match. Then I do an IRA for a certain amount. Then I invest in "things" directly. It would be difficult for the government to go after all the vehicles.

Offline Sunshine

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Re: Are 401(k)'s Safe?
« Reply #2 on: August 12, 2015, 09:26:43 PM »
I would agree with that... even if your stocks/investments are "diversified" it's not a good idea to have everything you own in the market... let alone in one 401k account.  (Different reasons, same principle.)

Still liking the idea of retirement planning being discussed elsewhere in the forums, as in having paid off land and resources.  But since we still have the 401k as well, thought it would make an interesting discussion.

Offline David in MN

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Re: Are 401(k)'s Safe?
« Reply #3 on: August 13, 2015, 08:02:04 AM »
I don't get it... There's no money in your 401. There's nothing to steal.

All the numbers in your 401 represent stocks and bonds you own, not real money. Most retirement plans are funneling money into Wall Street where fund managers take meager 1-3% off the top annually (meager?!) while conservative funds buy bonds thereby funneling money back to the government at depressed rates.

So your retirement is already propping up bankers and the government. They already did this. The result is that your retirement is a pile of stocks and bonds with no actual money to pilfer. Because it's already being used by the crooks.

Offline bigbear

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Re: Are 401(k)'s Safe?
« Reply #4 on: August 13, 2015, 11:47:15 AM »
Sure, it's possible.  It's unlikely, but possible.  There are places where banks take a slice of the balance over a certain threshold (ala Cyprus), so there's a precedent. 

I don't think it's likely under the current 'game' because it's built around getting money invested in the market.  If they do borrow from the 401k, then that's would slow the rate of money into Wall Street.  Plus, it would take a lot of push against the status quo to do so.  Once you start messing with someone's lifesavings, you're prodding the beast.  Think about how state employees push hard for their pension benefits despite the debt levels.  That's the type of passion will be stirred up if the 401k is messed with.  Sure it's possible, but I don't think it's likely in the next 5-10 years (i.e. foreseeable political future).

Online FreeLancer

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Re: Are 401(k)'s Safe?
« Reply #5 on: August 13, 2015, 12:34:44 PM »
The government has to figure in the outrage of the financial institutions that profit by skimming a percentage of the 401k accounts they administer, in addition to the account owners themselves, when contemplating raiding those assets.  Recent history has illustrated, yet again, that .gov does not have the will to go up against these powerful political donors.

The biggest risks with 401k's and other retirement vehicles are that most don't take full advantage of them by starting early and staying invested, as well as not paying attention to the effect of fees on performance over time.  The adversary to be really worried about is staring back at us in the mirror.

Offline Sunshine

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Re: Are 401(k)'s Safe?
« Reply #6 on: August 18, 2015, 10:15:24 AM »
I don't get it... There's no money in your 401. There's nothing to steal.

All the numbers in your 401 represent stocks and bonds you own, not real money. Most retirement plans are funneling money into Wall Street where fund managers take meager 1-3% off the top annually (meager?!) while conservative funds buy bonds thereby funneling money back to the government at depressed rates.

So your retirement is already propping up bankers and the government. They already did this. The result is that your retirement is a pile of stocks and bonds with no actual money to pilfer. Because it's already being used by the crooks.

Well... yeah.  Very true.  We all talk about accounts but until the money's in your hand I suppose there's no actual value.  Honestly, while I mention the pilfering of accounts, we're just as likely to see another crash that will make the value of all those stocks plummet, hence wiping out the value anyway.

Offline msparks

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Re: Are 401(k)'s Safe?
« Reply #7 on: August 20, 2015, 10:54:30 AM »

Interesting article: https://www.lewrockwell.com/2015/08/james-altucher/your-401k-plan-is-a-scam/ We had a webinar talking about this the other day. I just don't get it why people are so sold on these things.

Paying capital gains vs Income tax
Paying tax at a future rate
Government changing the rules or worse stealing it or making you put it in a "government sponsored retirement"
No use of the money today, forcing many people to borrow from banks.
Non diversified, 100% of your money is in the market (stocks and bonds) That's one big old basket if you ask me.


Offline outoforder2day

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Re: Are 401(k)'s Safe?
« Reply #8 on: August 20, 2015, 12:49:21 PM »
Well... yeah.  Very true.  We all talk about accounts but until the money's in your hand I suppose there's no actual value.  Honestly, while I mention the pilfering of accounts, we're just as likely to see another crash that will make the value of all those stocks plummet, hence wiping out the value anyway.

When it crashes is when you buy. Well, once it's crashed, anyway. Half the problem is that people just sold off their stocks when the crash happened. You have no chance to recoup your losses then! If you get caught in a recession and your portfolio is hit hard, best bet is often times to wait two years for the stocks that lost value to regain it. Assuming you have that level of faith in those companies.