« People Power | Main | Things that make you go hmmm (UPDATED) »

Because they know what's best for you

They being the government, and particularly the Obama Administration:

The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams following a collapse in retiree accounts when the stock market plunged.

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.

Annuities generally guarantee income until the retiree's death, and often that of a surviving spouse as well. They are designed to protect against the risk that retirees outlive their savings, a danger made clear by market losses suffered by older Americans over the last year, David Certner, legislative counsel for AARP, said in an interview.

...

Asset managers are concerned the government may go too far in encouraging annuities, said Mike McNamee, a spokesman for the Investment Company Institute. Seven in 10 U.S. households would object to a requirement that retirees convert part of their savings into annuities, according to a survey the group released today.

"Households' views on policy changes revealed a preference to preserve retirement account features and flexibility," the institute said in a report.

Interesting that the article opens with the government encouraging action by retirees but ends with a requirement to convert their savings into annuities.  Most interesting.

Especially to Gerard who while linking to the story above also adds a link to this relevant and cogent piece:

The Argentine state is taking control of the country's privately-managed pension funds in a drastic move to raise cash.

It is a foretaste of what may happen across the world as governments discover that tax revenue, and discover that the bond markets are unwilling to plug the gap. The G7 states are already acquiring an unhealthy taste for the arbitrary seizure of private property, I notice.

Would be good to read the whole thing.  And then rest in the security of knowing Obama would never do such a thing.

Never.

Crossposted(*).


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Comments (10)

I'm glad this is coming out... (Below threshold)
Mac Lorry:

I'm glad this is coming out now as it gives even more ammo to Republicans seeking election in 2010. It's not enough for Democrats to cut 500 billion from Medicare, now they want to rob seniors of their life savings. It's becoming real important for seniors to vote Republican in November.

BTW, many 401(k) plans and IRA have recovered much of what they lost in 2008 and early 2009. Obama knows that a year from now most retirement accounts could be back in positive territory, which would undercut the logic for forcing annuities down the throats of retired and soon to retire voters.

I have predicted government... (Below threshold)
sam:

I have predicted government control of 401(k) for a few years now.

it's simple logic: Government needs money. It will go where the money is. Where is the money? 401k's and other retirement savings.

Ergo, government will raid the 401k's.

It has no choice.

So I take part of my income... (Below threshold)
BlueNight:

So I take part of my income, and put it into a specific type of savings account so that I'll have that money in the future when I need it. And then the government is thinking of forcing me to take back some of my own money?

Even the setup for this gag doesn't make sense!

bluenight ...did y... (Below threshold)
Jeff:

bluenight ...

did you even read the post ???

the government would FORCE you to take money out of your 401k and put it into an annuity ... not that they will force you to take the money back ... see the difference ...

apparently you think the US Government knows better than you about what to invest your money in ...

Hear me now, believe me lat... (Below threshold)
Les Nessman:

Hear me now, believe me later...or not.

If this actually metastacizes into the govt taking over retirement accounts...well, Asst. Sec. Ponzi and many others will be instructed in the Constitution, including the 2nd Amendment.

No, I am not inciting or suggesting anyone do anything, in any way whatsoever. I'm just stating an easily foreseeable fact.

So, it seems that people ar... (Below threshold)
KingDavidLives:

So, it seems that people are thinking that the U.S. government is going to take retirement accounts away from its citizens? Yeah, right. I'd like to see them try it.

"So, it seems that people a... (Below threshold)
GarandFan:

"So, it seems that people are thinking that the U.S. government is going to take retirement accounts away from its citizens?"

Why not, they're about to make it a CRIME not to have health insurance. And they'll boldly look you in the face and say 'it's in the Constitution'.

Here's an even better plan.... (Below threshold)
GarandFan:

Here's an even better plan. We'll TAKE money out of your paycheck every payday. When you retire, we'll GIVE you money back each month.
How's that working out?

Hahahahahahahaha!!

Basically, this plan is ano... (Below threshold)
Rick Caird:

Basically, this plan is another social security. The proposal is put the the funds into an annuity using treasury bonds (sound familiar). That solves the problem of who to sell the bonds to.

I already have two annuities: social security and a small corporate pension. What I will need is some growth and that does not come from annuities.

If this plan gets legs, I will cash in all my 401k's and IRA's and take the tax hit all at once. But, then I can self direct what is left.

I wonder if Acron will be s... (Below threshold)
hcddbz:

I wonder if Acron will be selling Annuities because one size dose not fit all.

Since China and Japan are not buying USA debt well look like we Americans will just have to pony up some cash.

This reminds of some one on zdent who explained that you do not have a right to your own money, it all belongs to the government.




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