I have seen this topic several times in the last week or so. At first I thought it was just one of the radical ideas that was out there to scare people about “big government.” After I saw this several times I did some research and it seems to be a legitimate proposal that is being floated. The attached is a good summary.
Larry Kopsa CPA
(Investors Business Daily) -- In a guest editorial posted at Investors.com, former House Speaker Newt Gingrich and think tank director Peter Ferrara write that investors who "did the responsible thing" by saving in their IRAs or 401(k)'s may find that "Washington is developing plans for their retirement savings." They write that "BusinessWeek reports that the Treasury and Labor departments are asking for public comment on 'the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams.'" The op-ed states: "In plain English, the idea is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years." This would be done "to pay for their unprecedented trillion-dollar budget deficits, leaving nothing to back up their political promises," write Gingrich and Ferrara. Hearings on such a proposal were "held last fall by House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., of the Ways and Means Committee focusing on 'redirecting (IRA and 401k) tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute,'" according to the op-ed, which can be read in its entirety at http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521423>
