Friday, May 27, 2011

It's MY Money

Instead of figuring out a budget (Congress passed a budget on 15 April 2011, the Senate refuses to vote on the budget or provide one of their own).

Instead of addressing the certain doom of Medicare and Social Security (See above).

Instead of figuring out a way to allow businesses (both big and small) to create private sector jobs.

Instead of figuring out what to cut in order to provide disaster relief assistance to tornado ravaged states (but spent $500,000 on a shrimp treadmill)

Our Government wants to save us from our own money.  That's right, those wacky government types who want to "invest" in jello wrestling, bridges for turtles, and "green" golf carts want to stop you from spending your savings, namely your 401K savings.

Despite already stifling regulation, the government has discovered that by allowing you to take out loans from your 401K savings... you may not be able to (or want to) pay it back, even with the crushing tax burden penalty for not paying it back.  You see, despite their claims in 2009 that they had to spend money to make money and keep the unemployment rate below double digits (how's that working out for you?), the government doesn't want you to spend your retirement money (like they've spent your Social Security money) because that would be a hardship for you.

So, responsible people who may have some financial hardship can take out a loan of their retirement money, and pay it back in 5 years... but there's a pesky catch: if you lose your job, you have 60 days after you lose your job to pay it back in full or get the bejeezus taxed out of you.

Instead of reforming the 401k regulations to allow you to have an independent 401k that isn't based on your job, that was portable and allowed you to keep putting money into it, no matter where you worked, and repay your loan, whether you had a job or not... sorta like what some people suggested the Healthcare program be allowed to do.. nope, the government wants to limit your ability to borrow your own money.

That wonderful bill is called Savings Enhancement by Alleviating Leakage in 401(k) Savings Act of 2011 (‘SEAL 401(k) Savings Act’).  Wow, I wonder how many martinis and bazillions of tax dollars it took to come up with that catchy acronym.  Sponsored by Senator Kohl (a guy who isn't going to run in 2012 and doesn't have to worry about his retirement because you, the taxpayer, will be paying him for the rest of his natural life), it wants to limit how many loans you can get (most 401k plans already do that), ends the deferral if you take out a hardship loan, which will allow you to continue contributing to your 401k (currently if you take a hardship loan you cannot contribute to your 401k or receive employer matching funds for 6 months... probably because if you took out a hardship loan, you need all the money you can get), and extend the 60-day limit of rolling over your loan offset into an IRA or other qualified plan and give you until the tax filing deadline to roll over the offset (note to self: don't get fired at the beginning of April).

Now, while all of this seems benign and "helpful" to people who have 401k loans, the issue is: the Government has NO business telling you what you can and can't do with your money.  Its YOUR money.  If you want to take out one loan, or 5 loans... its YOUR money.  If you get in over your head, lose your job, or can't pay your bills because you took out too many 401k loans... tough!

But wait, it gets better... because this is just a precursor of the Government just TAKING your money and "investing" it in a more safe environment instead of in that pesky private sector stuff.  I'm sure you are saying "Pshaw!  You scare monger, you supporter of BIG OIL and BIG BUSINESS"... um, whatever, because if you work for the Government now... your pension money is already being siphoned off to pay for the debt that we can't pay for because we've hit that inconvenient debt ceiling already.  Yep, all that pension money was just sitting there anyway waiting for you to retire, so the Government feels it would be put to better use now by paying for all of the crap they want that they can't pay for because they took the crap buying money and paid for something else... like shrimp treadmills.

So, what happens when they run out of Federal pension money or need to pay someone's Federal pension... yep, their hand will be in the 401k pocket in the guise of "investing it in a more secure Treasury Bond program that isn't at risk with the whims of the free market" blah blah.

But you can breathe a sigh of relief in knowing that Medicare and Social Security will be there for you in your golden years... HAHAHAHAHAHAHAAAAAAAA.


Painter Pack said...

You always tell the truth so well! Before long, the government will be taking our paychecks because they can better pay our bills than us! We'll have a little debit card with an allowance on it for pesky things like food and tampons. But no sodas or candy when you're PMS'ing...and no cigarettes unless you are the president...but all the beer we can drink!

Anonymous said...

I still take issue with the federal govt stepping in for things like "tornado relief". That is much more efficiently done by letting me donate to them directly or indirectly through the red cross. Instead of losing half of the money to "administrative" costs.