Congress Seizing your Private Retirement Savings?
Is this headline News or Noise?
For one reason or another, every 6 to 12 months, since 2008 or 2009, an unsubstantiated story seems to make the rounds that the US government is looking at confiscating your IRA and 401(k) retirement savings accounts. This is categorically false. All of these stories seem to emanate from a Oct 7, 2008 (yes, you read that date correctly) hearing by the House Committee on Education and Labor looking into the recession’s impact on retirement savings and its security. Readers will recall, in 2008, the values of 401(k)s and IRAs were plummeting. The Congressional panel discussed whether the federal government should promote alternative plans that would help shield retirement savings from economic turmoil such as the Great Recession. They looked at the notion of creating a new savings and retirement instrument that added a federal government, tax-payer-paid-for, inflation-adjusted, guarantee. There has been no discussion of such a program since.
Throughout the history of almost all federal government savings and retirement plans, there have been changes around the edges. However, there have been no major negative changes to any of these programs in decades. Both political parties are guilty of dropping “new breaking” random ideas on the saving subject on the markets whenever the mood seems to strike them. None of those ideas have gone anywhere.
There was Obama’s notion of ending the 529 college savings plan deduction. That lasted for a week. During the Trump administration, there was brief talk about changing the tax law around deductability regarding 401(k) contributions. It went nowhere.
Lately, the noise has once again gotten louder, most likely due to a few well publicized cases of some very wealthy and prominent investors having multiple large IRAs, and how those ultra-wealthy individuals used the current rules to legally amass fortunes, while deferring taxes on capital gains in venture capital or private equity investments. Most notably is Peter Thiel’s $5 billion, mega-Roth IRA.
Might these well-publicized cases try to get some member sof Congress to marginally change the tax rules around retirement savings plans in the future? Yes, that is highly likely. Congressional Democrat’s are looking for ways to offset their current spending proposals. Will it lead to a wholesale changes or confiscation of your private retirement savings? Virtually no chance.
Is this News or Noise? NOISE
Article Sources:
https://thereformedbroker.com/2017/09/06/theyre-coming-for-your-401k/
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