Originally published May 18 2013
Obama coming after your 401(k) - Government to limit your retirement savings
by J. D. Heyes
(NaturalNews) Thank goodness for President Barack Obama, for without his wisdom and foresight none of us would know how to live our lives, and in particular, how much money we need to save for our own retirement.
Consider the president's proposal for the government to come after a portion of your retirement by limiting the amount of money you can put into your 401(k). If Obama has his way, the government will begin to penalize you (as in tax you) if you save more than $3 million for your own retirement.
Is it any wonder why his critics call him a socialist?
Now, hold on a moment. Before you start shouting, "Holy smokes, man, that's a lot of money! Why shouldn't Americans have to pay taxes on 401K programs above that amount?"
There are plenty of reasons why, up to and including the fact that the government is a lousy financial planner (look at how our "leaders" have raided Social Security, which now teeters on bankruptcy).
Why does this president try to define our lifestyle?First of all, you can't let Obama and his class-warfare claptrap define the issue. Understand that from the get-go, the premise of his argument is completely bogus because it assumes a) the government has an inherent right to your retirement savings; and b) that Obama has a right to set the amount of retirement savings you are allowed to have before he penalizes you.
Who is he - or anyone else - to put a limit on what you can earn and save, without having a portion of it stolen from you by government?
It is a bass-ackwards economic principle. Per Forbes, a media outlet that knows a thing or two about finances, personal and otherwise:
President Obama's understanding of financial planning is fundamentally flawed. In his latest budget, the chief executive proposed a cap on tax-preferred retirement accounts. An individual's total balance could not accumulate over $3 million. This total would include the sum balances of a traditional IRA, Roth IRA, 401(k) and defined contribution plans.
Obama justified his budget by saying, "Tax-preferred savings vehicles are intended to help middle class families save for retirement. But under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving."
Obama further states that $3 million is "an amount sufficient to finance an annuity of not more than $205,000 per year in retirement."
Punishing success and the American dreamSo not only does Obama want to penalize you for being successful - a truly anti-American proposition - but he wants to limit the amount of money you live on in retirement.
There's more. The heart of Obama's budget plan, and this particular "proposal" in particular, is to raise more taxes, period. The man and his party are already responsible for raising trillions of dollars in new taxes via the expiration of the 2 percent payroll tax Jan. 1 and the horde of new taxes and "fees" that Obamacare will raise (and is raising).
Moreover, according to Forbes, the president's figures aren't even accurate: "A $3 million account might be able to purchase a fixed annuity of $205,000 at age 65. But the quotes we received were all below that."
Whether you believe the government has a "revenue problem not a spending problem," understand that this proposal is exactly the wrong way to fix it. And know this: Your money may be growing tax-free while in your retirement accounts, but it is taxed as you withdraw it. If you don't withdraw it all before you die, don't worry - the government's death tax will grab a huge portion of it. So either way, Uncle Sam is getting his "fair share" - and then some.
Hypocrite-in-chiefOne more thing. Forbes points out that while Obama is raiding your retirement accounts, "workers are more likely to have fat compensation packages of government-defined benefit plans and pensions. These would not be limited in any way by his proposal. To punish private sector defined contribution plans and reward public sector defined benefit plans is egregiously self-serving."
To Barack Obama, the government can never tax enough, spend enough, and deprive you of your financial liberty enough. Nothing is out of bounds. All he is proposing is more taxing and spending, and this "strategy" would be unacceptable no matter who is president.
Nothing defines liberty as much as economic freedom. It is a fundamental American principle. When Americans begin to be punished for essentially saving too much money for retirement, it is well past time to reform our tax code.
One last thing. Obama will earning in excess of $350,000 annually in retirement, or the draw from an $8 million retirement account. Per Forbes, "Obama's own government pension is more than sufficient by his own standard."
Whatever you think of this proposal, you can add hypocrisy to it.
Sources for this article include:
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