A little-noticed rule from the Department of Labor this week could affect millions of retirement investments. On page 4 of the proposed regulation, DoL expresses the view that “seldom” can Americans “prudently manage retirement benefits on their own” and that they “generally cannot distinguish good investments from bad.” The government steps in and makes the cost of some of these investments too high for many. The Competitive Enterprise Institute calls it “Obamacare for Your IRA.”
It’s a hidden tax scheme you can read about at Fox Business. The point of mentioning it is that the government thinks you’re stupid and they need to step in.
The Government will continue to circumvent Congress with constant new rules and your savings are very important to them.
High on the socialist dream list is big government control of private savings and retirements. We are inching towards that reality instead of facing an immediate massive takeover.
The reason the government uses to support a takeover is that people aren’t saving and eventually become government burdens. It is also being labeled a “human right”.
Only Big Government can solve the problem by instituting another unsustainable entitlement like Social Security and Obamacare. The government in turn gets to use your money while you are alive and, after you die, the government gets to keep the savings as they do with government pensions now.
MyRA, instituted by Barack Obama, allows low and middle class Americans to save in government plans. They can never lose their principle and they always receive interest. The problem is their money is invested in low-yield treasury bonds which pay insignificant amounts and it does nothing to change the fact that the people aren’t saving because they don’t have the spare money, which means that at some point the government will force people to save.
The left-wing government’s excuse or belief is that they must do for Americans what they cannot or will not do for themselves because savings accounts are a human right. Greece would undoubtedly agree with that.
The left-wing Service Employee International Union, or SEIU, a key labor union ally of the Obama administration, mounted an effort in 2014 to create government-mandated worker retirement accounts as an entitlement program, with the possibility that a portion of all private retirement funds could be forced into U.S. Treasury debt.
Branding the program “Retirement USA,” the SEIU joined with the AFL-CIO, the Economic Policy Institute, a Washington-based economic left-leaning think tank that receives substantial labor funding, and two other left-leaning interest groups, the Pension Rights Center and the National Committee to Preserve Social Security.
The left’s Retirement USA idea is promote the concept that all workers in the U.S. have a right to a government retirement account that would fund a secure retirement with adequate dollars, in addition to Social Security and private ERISA-retirement workplace retirement programs such as 401(k) programs.
“Our goal is to involve all workers and all employees in a government-mandated retirement program, with the government putting up the difference for lower paid employees,” Nancy Hwa, a spokeswoman for the participating Pension Rights Center said.
The unions like it because the government would also “invest” in government pensions using the savings in accounts. It’s an $18 trillion dollar business.
Americans have more than $18 trillion in savings with 25% of it in IRA’s. It is a future source of revenue for the government if they can get their hands on it.
The EU has confiscated retirement and savings accounts to pay for their overspending and government savings accounts could one day become such a target.
An article on CBS News MoneyWatch in 2014 promoted the idea that people (Americans) are incapable of planning for retirement. They say that there has to be a new way of thinking about retirement.
“Rational choice theory” is out, the article declared. “Rational choice” theory has been the economic model for retirement savings. It assumes people make decisions by putting together a list of options, choosing from them and doing so in one’s best interest. It also assumes people have access to the information they need.
The article quotes Behavorial scientist, Richard Thaler of the University of Chicago, as having once said, “For many people, being asked to solve their own retirement savings problems is like being asked to build their own cars.”
We now know, moneywatch concludes, that most people aren’t “rational decision makers”.
I’d like to add that neither do the thieves in the government act as “rational decision makers”.
Moneywatch has a decidedly jaundiced, cynical and condescending view which aligns quite nicely with the leftists in the administration. Even if it is true, what business is that of the government?
CBS, NBC , abc news praised Obama’s use of his pen and phone to institute MyRA for people who make up to $191,000. The plan is backed by taxpayer dollars. It is a plan that will in the end give a meager payout, if that, after they have used your money for decades.
Mr. Obama laid out a socialist plan for savings and retirement beginning with his fy2008 budget and which he resuscitated in fy2013.
The socialists clearly believe the government should be the stewards of everyone’s money.
In 2008, Obama first proposed a Guaranteed Retirement Account (GRA) for all, which would require businesses to offer automatic IRA’s. Included would be a mandate to invest 10% in U.S. Treasury bonds which is nothing if not another way of funding the profligate national government.
Obama’s fy2013 budget plan resuscitated the planned theft of savings with “Secure Choice” and “GRA’s” which would mandate 5% to 6% investment in government-controlled pension funds.
The scheme would go like this. The government would deposit $600 into your GRA and each worker would in turn deposit 5% of each paycheck into the account. In return, the government will magically guarantee a 3% tax-deferred return on these assets from who knows where because you know there will be no lockbox and they will spend the money just as they have with social security.
It would be forced savings.
Anyone refusing to cooperate would suffer additional penalties and taxes on any withdrawal of their savings from retirement funds. They would be mandated into investing a minimum amount in U.S. Treasury debt.
What all this means in the end is the government wants to take over your 401K and run it like Social Security. They would take control over your savings with the promise that you would receive a paltry monthly pension upon retirement.
The government wants to manage your savings without your having any say while you are saving and then confiscate it after you die. Under Obama’s plan, when a retiree dies, the government gets what is left over.
In summation, Secure Choice Pension and Government Retirement Accounts (GRAs):
- Automatically take away 5% – 6% of your earnings and put it into a pooled GRA.
- Your tax refund checks will be automatically put into the pooled GRA – you won’t see a tax refund check again.
- Your unused vacation pay will convert to income and it will be put into the pooled GRA.
- The funds in your current retirement account will be converted to “longevity annuities,” which wouldn’t make payments until you’re very old.
- Once you die, your uncollected equity becomes the property of the government.
- The guaranteed 3% return won’t keep up with inflation.
In 2012, Obama’s National Commission on Fiscal Responsibility and Reform proposed lowering the cap on the taxable amount workers put into their 401K’s. They are not interested in helping you save, they are interested in taking part of what you’ve saved.
Taxing retirement is a way of pilfering your savings. It discourages saving.
President Barack Obama’s Fiscal Year 2013 budget plan estimated that retirement tax deductions taken by employers and individuals over the ensuing five years add up to $429 billion in “lost” tax revenue.
The government believes your savings is their lost revenue. If you take a legal tax deduction, the government believes they are being cheated out of revenue.
In fy2014, the plan was once again to bring us closer to de-privatizing IRA’s & 401K’s. Obama’s “Automatic IRA” will force employers with 10 employees or more, to “automatically” enroll their workers in the new Government run accounts. Obama’s Automatic IRA will be managed by the Social Security Administration(SSA).
In January of 2015, the Democrats pushed for automatic, government-controlled IRAs.
Illinois put The Illinois Secure Choice Savings Program (SCSP) into law on January 4, 2015, effective this month. Like MyRA, it is voluntary. It won’t remain that way and neither will MyRA. Currently, if employers in Illinois don’t make it available, they will face fines on each employee. It’s the camel’s nose under the tent.
Illinois is the first to pass such a law but others are now considering it because the leftists created a fake crisis that everyone has now bought into.
The original idea behind 401Ks and IRAs was to give citizens the incentive to save. Socialism’s idea is to use it for the common good of which they will be the guardians.
Anyone refusing to cooperate will suffer additional penalties and taxes on any withdrawal of their savings from retirement funds. They would be mandated into investing a minimum amount in U.S. Treasury debt.
If retirement becomes a human right, only the government can be in charge and that is the direction we are headed.
Redistributing wealth is just the starting point on the road to socialism and it’s not only the rich who will be affected. Eventually Big Government will redistribute your money, your savings, as well. This is how Greece got to where they are.