I seem to be hearing more and more about the gov’t coming in and seizing 401k & IRA funds. I think this would result in chaos the likes of which only Charlie Sheen could imagine. Anyone have any thoughts or good articles on the subject?
I think you should grab your guns and move your family to Montana. “They took er retirement accounts!”
Which compound were you visiting when you heard this? I can see Roth distributions being taxed at some level in the future, but out-right “seizing” of retirment accounts seems a bit far-fetched in the US. At least for the foreseeable future.
Who’s telling you that, the voices in your head?
If you have unpaid taxes, yes, they can seize retirement accounts.
bchadwick Wrote: ------------------------------------------------------- > If you have unpaid taxes, yes, they can seize > retirement accounts. Always the well-informed voice of reason.
bchadwick Wrote: ------------------------------------------------------- > If you have unpaid taxes, yes, they can seize > retirement accounts. cant argue with that. if you owe and you have, pay.
higgmond Wrote: ------------------------------------------------------- > I can see Roth distributions being taxed at > some level in the future Even that sounds pretty crazy. The whole point of Roth is that you frontload tax now. You shouldn’t get taxed twice.
It doesn’t sound to me like the voices in the OP’s head are talking about IRA money being seized to pay back taxes.
I’ve often wondered how safe the Roth IRA exclusion is. All it takes is a change in the law and, POOF, Roth distributions are taxable. I’m sure that as budget deficit efforts become more intense, at least some congressionals will consider making Roths taxable. If you think that might happen, then putting money into a traditional IRA account is an option, since you can deduct that from present taxes and still have it grow tax free. If that option closes, then you are stuck with investing normally for retirement without the benefit of tax-deferred or tax-free accounts. But there’s no reason to forego the traditional IRA until anything changes. If Roths become taxable, there will be the question of how to treat all those people who converted traditional IRAs to Roth IRAs and already paid taxes on the conversion. Since the benefit of doing that is that your withdrawals are not taxable, then these people would effectively pay double tax on deposit and then again on withdrawal, which might be challengeable in the supreme court. Siezing entire retirement accounts (as the OP suggested) just for fun is unlikely, though (as opposed to simply making them taxable). The Constitution does protect against siezure of property without due process of law, so someone would have to be convicted of a crime in order to have their retirement accounts siezed. It’s hard to figure out why retirement accounts specifically would be targeted, since it penalizes those who have saved for retirement, and thus drives up the costs of funding retirees. There may be a push to redistribute some of that money if large numbers of people can’t afford to retire, but the US (despite all the tea party whining) is not a country that gravitates toward full socialism, and ensuring that all old people are equally impoverished is just not a policy that I can see ever flying.
All of the scenarios mentioned in this thread are wildly implausible and not really worth discussing. The IRA rules might change of course, but they would do so only prospectively barring truly extreme and bizarre circumstances.
Captain Windjammer Wrote: ------------------------------------------------------- > All of the scenarios mentioned in this thread are > wildly implausible and not really worth > discussing. The IRA rules might change of course, > but they would do so only prospectively barring > truly extreme and bizarre circumstances. Tell that to families of “rich” folks who died between Jan 1, 2010 and Dec 17, 2010. When Daddy Big Bucks died, there was no estate tax, but it was reintroducted retroactively as part of the 2010 Tax Relief Act.
bchadwick Wrote: ------------------------------------------------------- > I’ve often wondered how safe the Roth IRA > exclusion is. All it takes is a change in the law > and, POOF, Roth distributions are taxable. I’m > sure that as budget deficit efforts become more > intense, at least some congressionals will > consider making Roths taxable. > If things get bad enough, I would not be at all surprised if the govt. imposes some type of tax on Roth distributions. I don’t think it will be large and they probably won’t call it a tax (maybe it will be a flat fee charged on every disbursement), but they’ll find some way to get at that money if they really need to.
higgmond Wrote: ------------------------------------------------------- > Captain Windjammer Wrote: > -------------------------------------------------- > ----- > > All of the scenarios mentioned in this thread > are > > wildly implausible and not really worth > > discussing. The IRA rules might change of > course, > > but they would do so only prospectively barring > > truly extreme and bizarre circumstances. > > > Tell that to families of “rich” folks who died > between Jan 1, 2010 and Dec 17, 2010. When Daddy > Big Bucks died, there was no estate tax, but it > was reintroducted retroactively as part of the > 2010 Tax Relief Act. I think you’re misunderstanding what that act did - the taxpayers you’re talking about may still elect to be subject to the modified carryover basis rules, which were already in place for 2010. Here are a couple of primers: http://wills.about.com/od/understandingestatetaxes/qt/2010-Estate-Tax-Rules.htm http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2010/Tax/RepealofEstateTax.jsp
Yeah, the estate tax didn’t totally go away for that bit. There have been some shady tax law changes in history though. There have been retroactive tax increases since the 1930s. The most recent coming in 1993 under Clinton (could be wrong). That seemed wrong to me because people made decisions based on current rates and got the rug pulled out from under them. Of course this is nowhere near seizure of assets, but shady in my book.
Captain Windjammer Wrote: ------------------------------------------------------- > > I think you’re misunderstanding what that act did > - the taxpayers you’re talking about may still > elect to be subject to the modified carryover > basis rules, which were already in place for > 2010. > > Here are a couple of primers: > > http://wills.about.com/od/understandingestatetaxes > /qt/2010-Estate-Tax-Rules.htm > > http://www.cpa2biz.com/Content/media/PRODUCER_CONT > ENT/Newsletters/Articles_2010/Tax/RepealofEstateTa > x.jsp I did misunderstand. Thanks.
higgmond Wrote: ------------------------------------------------------- > Captain Windjammer Wrote: > -------------------------------------------------- > ----- > > > > I think you’re misunderstanding what that act > did > > - the taxpayers you’re talking about may still > > elect to be subject to the modified carryover > > basis rules, which were already in place for > > 2010. > > > > Here are a couple of primers: > > > > > http://wills.about.com/od/understandingestatetaxes > > > /qt/2010-Estate-Tax-Rules.htm > > > > > http://www.cpa2biz.com/Content/media/PRODUCER_CONT > > > > ENT/Newsletters/Articles_2010/Tax/RepealofEstateTa > > > x.jsp > > > I did misunderstand. Thanks. Well done, sir. No problem.
Is that Glenn Beck?
marcus phoenix Wrote: ------------------------------------------------------- > Is that Glenn Beck? You do realize that you are Glenn Beck, but on the other side…don’t you? ; )