Would you turn over your retirement account to an outfit that has squandered its own financial reserves, spends twice as much money as it takes in and has a debt load of seven times annual revenues?
Not likely. But that’s what the Obama administration is proposing Americans do with their 401(k) and Individual Retirement savings accounts.
The U.S. Treasury and Labor departments are asking for public comment on a plan to require individuals to convert some of their retirement portfolios into annuities backed by U.S. Treasury bonds.
The administration is motivated by the financial markets crash of 2008, which saw the average 401(k) fund balance drop 31 percent to $47,500 from a high of $69,200 in just over a year’s time. That sudden drop has caused many in Washington to question the policy value of exempting high-risk retirement portfolios from income taxes.
The theory is that annuities will provide a more reliable income stream for retirees and less risk for those saving for retirement. The added benefit for the federal government is that it will have a new revenue stream to finance its spending binge.
The dirty little secret, that the public is not being told, is that these roll over’s into annuities WOULD BE FULLY TAXABLE!
So, in addition to the horrible performance and gross mismanagement mentioned in the article, the government would reap a "Windfall Profits Tax" by forcing people to take this action – thus significantly reducing the value of the people’s retirement funds and gaining more tax money to cover Obama’s Caligula like spending spree.