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Years ago the 401K was promoted as a better replacement to the defined benefit pensions because people could invest and earn as much as they wanted in the 401K and have a better retirement with alot more money.
Well we all know how that turned out. Average balance is about $47K which is squat compared to a guaranteed defined pension.
So here's the government to the rescue. They will convert your 401K/IRA to an annuity with guaranteed income. Of course the insurance companies will get a great benefit from having your money now. Top of the list is everyone's darlling..AIG. So, wanna hand over your precious 401K/IRA money to AIG to hold and send you monthly checks for the rest of your life ?
A year or two ago someone spoke to Congress about government managed 401K's because "the people want that". Just google "Teresa Ghilarducci".
Here's a link about her presentation to Congress. Her goal is that "everyone" should be covered with a government sponsored, mandatory enrollment in a replacement of the 401K. House Democrats Contemplate Abolishing 401(k) Tax Breaks | workforce.com
snippet:
"The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams...
..
There is “a tremendous amount of interest in the White House” in retirement-security initiatives, Borzi, who heads the Labor Department’s Employee Benefits Security Administration (http://www.dol.gov/ebsa/ - broken link), said in an interview. "
So what's the big deal? You just said your average 401K has a balance of $47K.
Does that sound like most of these liberty and freedom loving Americans are responsible enough to save for retirement?
It doesn't to me.
It sounds like the are going to fall back on Medicare, Medicaid, and social security for all their income.
Force them to save a small portion so they can have a minimal amount to retire on.
I swear you right winger are against everything that would help your small rural towns....Every single thing you attack as government encroachment when it reality it helps your families and communities.
No wonder your the poorest and least educated among whites in America.
So what's the big deal? You just said your average 401K has a balance of $47K.
Does that sound like most of these liberty and freedom loving Americans are responsible enough to save for retirement?
It doesn't to me.
It sounds like the are going to fall back on Medicare, Medicaid, and social security for all their income.
Force them to save a small portion so they can have a minimal amount to retire on. Isn't that called Social Security ?
I swear you right winger are against everything that would help your small rural towns....Every single thing you attack as government encroachment when it reality it helps your families and communities.
What does a 401K or IRA have to do with communities ?
No wonder your the poorest and least educated among whites in America. Huh ? Born in NYC, two BS degrees and I just found out that I guess I must be rich because my healthcare from my job is classified as a cadillac plan.
"And..BTW..$47K in an immediate annuity for a 65 year old man living in California would get you $290/month.
IMHO the banks/insurance companies are chomping at the bit to get at those funds."
Just for clarification, how do the banks have a vested interest in annuities ???? I dont compete with banks for annuity business, they cannot write them !
Only an insurance company can issue an annuity. And you do realize that AIG's insurance side of business is incredibly stable.
And my last point.... who in their right mind would annuitize $47k ????? In this market, if all you have for retirement is $47K, an annuity may not be a bad idea for some, many of the indexed, fixed products have decent returns with no risk. But what do I know.
I thought social security security was the govt's forced saving retirement plan. They best not touch my 401k. Bad enough I have to pay into SS which I will doubtfully ever get to collect on.
"And..BTW..$47K in an immediate annuity for a 65 year old man living in California would get you $290/month.
IMHO the banks/insurance companies are chomping at the bit to get at those funds."
Just for clarification, how do the banks have a vested interest in annuities ???? I dont compete with banks for annuity business, they cannot write them !
Only an insurance company can issue an annuity. And you do realize that AIG's insurance side of business is incredibly stable.
And my last point.... who in their right mind would annuitize $47k ????? In this market, if all you have for retirement is $47K, an annuity may not be a bad idea for some, many of the indexed, fixed products have decent returns with no risk. But what do I know.
In total there's about $3-4 trillion in 401K accounts. That's a heck of a lot of $47 accounts there.
My reference to banks went more along with the other link about abolishing the 401K and having everyone mandatory contribute to another type of retirement savings.
Yes..$47K in an annuity is not what financial planners recommend.
But what do you know ? A whole heck of a lot more than Uncle Sam I'll wager.
Are they planning to use it for taxes and then tell us we didn't pay it in either.
I am so glad I lived for 64 years before I knew what a bunch of crooks we elect year after year.
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