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  1. #1
    Senior Member HAPPY2BME's Avatar
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    Obama Begins Push for New National Retirement System

    Obama Begins Push for New National Retirement System

    A representative of the liberal Pension Rights Center, Rebecca Davis, testified that the government needs to get involved because 401k plans and IRAs are unfair to poor people. She demanded the Obama administration set up a "government-sponsored program administered by the PBGC (the governments’ Pension Benefit Guarantee Corporation)." She proclaimed that even "private annuities are problematic."
    nationalseniorscouncil.org

    A recent hearing sponsored by the Treasury and Labor Departments marked the beginning of the Obama Administration’s effort to nationalize the nation’s pension system and to eliminate private retirement accounts including IRA’s and 401k plans, NSC is warning.

    The hearing, held in the Labor Department’s main auditorium, was monitored by NSC staff and featured a line up of left-wing activists including one representative of the AFL-CIO who advocated for more government regulation over private retirement accounts and even the establishment of government-sponsored annuities that would take the place of 401k plans.

    "This hearing was set up to explore why Americans are not saving as much for their retirement as they could," explains National Seniors Council National Director Robert Crone, "However, it is clear that this is the first step towards a government takeover. It feels just like the beginning of the debate over health care and we all know how that ended up."

    A representative of the liberal Pension Rights Center, Rebecca Davis, testified that the government needs to get involved because 401k plans and IRAs are unfair to poor people. She demanded the Obama administration set up a "government-sponsored program administered by the PBGC (the governments’ Pension Benefit Guarantee Corporation)." She proclaimed that even "private annuities are problematic."

    Such "reforms" would effectively end private retirement accounts in America, Crone warns. "These people want the government to require that ultimately all Americans buy these government annuities instead of saving or investing on their own. The Government could then take these trillions of dollars and redistribute it through this new national retirement system."

    Deputy Treasury Secretary J. Mark Iwry, who presided over the hearing, is a long-time critic of 401k plans because he believes they benefit the rich. He also appears to be one of the Administration’s point man on this issue.

    "This whole issue is moving forward very quickly," warns Crone. "Already there is a bill requiring all businesses to automatically enroll their employees in IRA plans in which part of every employee’s paycheck would be automatically deducted and deposited into this account. If this passes, the government will be just one step away from being able to confiscate all these retirement accounts."

    NSC has taken the lead in warning the nation about this new government onslaught and is plotting ways to stop it.

    "This effort ultimately is designed to grab the retirement nest eggs of America’s senior citizens. This new government annuity scheme, even if it is at first optional, will turn into a giant effort to redistribute the wealth of America’s older citizens," explains Crone. "This scheme mirrors what I expect the President will try to do with Social Security. He wants to turn that program into a welfare program, too."

    NSC will likely unveil a new grassroots campaign effort later this year or early in January to coincide with the seating of the new Congress.

    Obama Begins Push for New National Retirement System
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    Senior Member HAPPY2BME's Avatar
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    Retirement 'Perfect Storm' Coming in 2013

    By Mark Koba | CNBC – Thu, Nov 15, 2012 12:50 PM EST



    An estimated 7 million Americans will reach the age of 65 by the start of 2013, and many will no doubt be thinking about retiring.

    But even if falling off the "fiscal cliff' is avoided, some financial experts are warning anyone thinking about trading in their paycheck for a retirement fund next year.
    "It's kind of a perfect storm in 2013 when you think about it," said Jason Wheeler, CEO of Pathfinder Wealth Consulting.

    "With questions about taxes, spending cuts, the markets, health care-and then put those together with the number of seniors wanting to retire or will lose their jobs-the year could be a rough one when it comes to retirement," he said.

    Topping Wheeler's worry list seniors are taxes.

    "The magnitude of what a retiree will pay on their investments could really hurt their finances," he said. "And right now we don't know what that will be."

    If no deal is reached to solve the fiscal cliff by Dec. 31, the Bush tax cuts end and rates go higher on capital gains and dividends.

    As it stands now, the top tax rate on capital gains will jump to 23.8 percent from 15 percent and the top tax rate on dividends nearly triples to 43.4 percent from 15 percent. And any fiscal deal will likely include higher tax rates so seniors had better count on that when they plan for their retirement, said John O. McManus, CEO of McManus & Associates, a trust estates law firm.

    "Many seniors may want to postpone retirement in 2013 because they just don't know what their tax rates will be," McManus said. "If the markets don't perform well and tax rates go higher, seniors will have a lot less money to spend. There's a lot of uncertainty about where this will all end."

    (More From CNBC: Will 'Fiscal Cliff' Resolution Engulf Social Security?)

    But McManus said even planning for tax increases won't be easy.

    "If someone retires in January but a deal isn't reached until March, will tax rates be re-retroactive? That's a big risk for someone thinking about retirement," said McManus.
    More seniors than ever are depending on defined contribution plans to fund their retirement as traditional pension programs decline. Only one in five people in the private sector actually have a pension plan in place, according to the National Institute on Retirement Security.

    And though the most recent IRS data show that more than 63 percent of taxpayers with qualified dividend income are age 50 and older, some 23 percent of workers don't participate in a retirement plan-leaving many seniors unprepared for their golden years.
    "The vast majority of people don't have the money to retire," said financial planner Bill Losey, president of Bill Losey Retirement Solutions. "For instance, they don't max out the contributions to their 401(k)'s. I think people need to have two to five years' worth of expected income before they can think about retiring."

    Another part of the storm facing seniors in 2013 is Social Security. Retirees will see an increase in their payments-but only by 1.7 percent, less than the 3.6 percent they got in 2012. That's because the payments are adjusted to inflation-which Wheeler said is low but not low enough.

    (More From CNBC: New IRS Rules Help Retirement Savers Catch Up)

    "Food, clothing, gas, everything is inching up in price while salaries remain low," he said. "Seniors will feel the pinch if they retire next year." (Read More: Inflation Climbs.)
    Inflation hurts those seniors who looked to fixed income investments like bonds, for retirement funds, said Chris DeGrace, first vice president for private wealth management at SunTrust Investment Services.

    "Given how low interest rates are and will be for the next few year with what the Federal Reserve is doing, it's going to be hard for seniors to generate needed income," DeGrace said. "There will be more stress on them to find other types of guaranteed income streams."

    If their incomes are going down, seniors face rising health care costs in 2013. A report from Fidelity Investments found that a 65-year-old couple in 2012 would need an estimated $240,000 to cover medical costs through their retirement-a 50 percent increase from 2002. That figure will likely increase to $260,000 next year.

    And those on Medicare will see their monthly premiums go up from $104.20 in 2012 to $120.00 in 2013-as well as increased taxes on the wealthy to help pay for Obamacare.
    "More and more people are going to be responsible for their health care costs as they get older," Wheeler said. "Even with Medicare, and as companies stop providing coverage to their retirees, those costs loom large for seniors."

    While 2013 presents unique problems, analysts say that in the end, planning for retirement never comes at an easy time, fiscal cliff or not.

    "Seniors need to think about that if they leave the workforce, can they get back in, no matter what the year?" said Losey. "Are they retiring because they need a break? I've had clients say three to six months later that they want to work again because they are bored. And these days it's difficult for seniors to get jobs that pay well when companies are hiring younger people at lower salaries."

    "It's not to say that 2014 will be a better year to retire," said McManus. "There are a always a lot of things people can't control, like the markets and global issues. I'm just saying that if you think about retiring in 2013 you need to take care and take caution."

    Retirement 'Perfect Storm' Coming in 2013 - Yahoo! Finance
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    Senior Member AirborneSapper7's Avatar
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    U.S. fed-state govts eliminating private pensions & retirement accounts

    Posted on November 27, 2012 by Dr. Eowyn | 8 Comments

    In a post nearly a year ago, I sounded this warning:

    The governments of five European countries — Hungary, Poland, Bulgaria, Ireland and France – have taken over their citizens’ private pension money to make up deficits and budget shortfalls. Given the American Left’s oft-stated admiration for Europeans, who are further down the ruinous road of socialism than the United States, this should sound the alarm for all Americans who want to hang onto our private pensions and savings.

    That was not paranoia speaking because a year before, in January 2010, Bloomberg’s Business Week had reported that the Obama administration wanted to convert all 401(k) savings and Individual Retirement Accounts (IRAs) into annuities or other steady payment streams.

    Business Week also reported that the Treasury and Labor Departments was planning to solicit the public’s reaction, although a report by the Investment Company Institute had already found that Americans oppose any government initiatives that would force us to give up control over our 401(k) accounts.

    Seven in 10 U.S. households indicated they wanted to preserve their present retirement account features and flexibility, and objected to the idea of the government requiring retirees to convert part of their savings into annuities that supposedly guarantee a steady payment for life.

    Now, it appears the Obama administration and state governments indeed are moving to get rid of private pensions and retirement plans.

    Linda Stern reports for Reuters, Feb. 29, 2012, that baby boomers may be the last generation to retire with 401(k) plans. A week before, a hearing on the future of pensions and retirement was held in the U.S. Senate, attended by representatives of unions, employers, financial services providers, government agencies and consumer groups. The only thing they all seemed to agree on was that the 401(k) plan has been sort of a failure, which is a most curious consensus, given the fact that current and future retirees have successfully amassed some $4.3 trillion in 401(k) and other defined contribution accounts.

    Stern reports that “policymakers are now looking beyond the once-vaunted 401(k) because it has two significant shortcomings: (1) It’s not powerful enough to secure the retirements of low-income workers who can’t afford to stash away enough money; and (2) It leaves each accountholder alone to manage risks.” Without being able to pool risk, participants have to settle for lower returns and lower withdrawals. That, in turn, reduces the amount that they can spend in retirement, and reduces the likelihood that their money will last until they die.
    Blah, blah, blah.

    In other words, there is a rising crescendo of voices calling for the conversion of privately-managed 401(k) and IRAs in favor of Government Retirement Accounts (GRAs) — government-managed retirement instruments like annuities that “promise” to “guarantee” retirees a “steady stream of retirement income” that’ll last until they die.

    Sounds just like Social Security, doesn’t it? The government takes money out of our monthly paychecks and puts it into our separate Social Security accounts. In return, when we retire, we’ll get a Social Security check every month until we die.

    And we all know how well that turns out.

    Stern concludes her report for Reuters by warning that policy changes down the road could change the shape of our retirement savings significantly because “everything from a curtailing of 401(k) tax breaks to new state-run programs is under consideration somewhere, by somebody.”

    A NewsMax report describes the latest move towards replacing private pensions and retirement plans with Government-run Retirement Accounts (GRAs):

    The Latest move can be found in the Obama Administration`s, 256 page- FY 2013 Budget Proposal. The revival of his 2008 presidential run, the “Automatic IRA” which has now “Evolved” into two proposals:

    Secure Choice Pension & Government Retirement Accounts (GRA’s), both of which automatically “Mandate” 5%-6% contributions into Government Run Pension funds.

    One feature of GRAs is once a participant dies, the uncollected equity belongs to the government. It’s no wonder the Retirement age for GRAs will be 67, and one proposal calls for 69 years of age. They’re “off the hook” as soon as you’re dead.

    Another change to the retirement account laws, the Tax Benefit. The current Tax Deduction will be replaced with a “Credit”, which is only redeemable after retirement. To be Eligible for the Tax Credit, you will be given the “Option” to place Your Equity into Annuities composed of U.S Treasury Bonds, that will payout an estimated 3% annually.

    Yes, you`ll be Investing/Buying what China No longer wants, U.S. Debt (Treasury-Bonds). [...]
    No matter who wins [the 2012 presidential eleciton], our government is Neck-Deep in Debt. When faced with the Reality of a Complete government Collapse… a Politician will do, what a Politician, needs to do! The $4.6 Trillion in IRA’s and the $4.3 Trillion in 401(k)s … are all too tempting!

    Some legislators already have introduced bills toward transforming Americans’ private pensions and retirement accounts into Government Retirement Accounts (GRAs):


    • S. 1020: Saving Enhancement by Alleviating Leakage in 401k Savings Act of 2011A U.S. Senate bill introduced on May 18, 2011, by senators Herb Kohl (D-WI) and Mike Enzi (R-WY). If approved, S. 1020 would “amend the Internal Revenue Code of 1986 to modify the rules relating to loans made from a qualified employer plan, and for other purposes.” In other words, S. 1020 (or the federal government) would impose restrictions on how 401(k) owners can access the money accumulated in their accounts. You wouldn’t even be able to borrow from your own 401(k) account!



    • California state bill, SB 1234: Golden State Retirement Trust – A bill introduced on February 23, 2012, by California congressman Kevin De Leon, to replace private pensions and retirement accounts with GRAs. Here’s a quote from SB 1234: “Existing federal law provides for tax-qualified retirement plans and individual retirement accounts or individual retirement annuities by which private citizens may save money for retirement. This bill would establish the Golden State Retirement Savings Trust Act, which would create the Golden State Retirement Savings Trust that would be administered by the Golden State Retirement Savings Investment Board, which would also be established by the bill. The bill would require eligible employers, as defined, and would authorize other employers to enroll eligible employees, as defined, into an employer-sponsored retirement plan or pension plan, as specified, offered by the trust, or a personal pension in the case of a nonparticipating employer, as specified. The bill would require a specified percentage of the annual salary of an eligible employee participating in the retirement or pension plan to be deposited in the Golden State Retirement Savings Trust, which would be segregated into a program fund and an administrative fund, both of which would be continuously appropriated to the board for purposes of the act. The bill would limit expenditures from the administrative fund, as specified.”


    • Connecticut state bill HB 5337: An act “to create a task force to study the need for a public retirement plan,” introduced on May 6, 2012, by Lauren Schmitz, a research analyst at the Bernard L Schwartz Center for Economic Analysis, the very same institution that had originated the GRA concept.


    • Other states such as, Massachusetts, Florida and Ohio have made or are actively conducting moves such as GRAs.



    And what will happen to all those Government Retirement Accounts? Why, like that mythic Social Security “trust fund,” the money in those GRAs will simply be dumped into the government’s ever-dwindling general funds to pay for the government’s ever-increasing expenses, of course!

    Don’t believe me?

    In May 2011, with little media publicity, the Obama administration began dipping “temporarily” into raiding the pensions of federal government employees to keep funding government operations. (Read more, here.)

    ~Eowyn

    U.S. fed-state govts eliminating private pensions & retirement accounts | Fellowship of the Minds
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