If Government Confiscates IRA's and 401k's, Are Annuities Safe?

[melvinmills]

There is some talk in the blogosphere that one way for the government to
raise money is to confiscate IRA's and 401k's.

If not confiscate, at least eliminate the tax benefits.

IF, and that is still a big IF, that were to happen, what do you think the chances
are that annuities could be confiscated as well?

 

[HealthGuy]

Anybody else wanna put on your tin hats..come on Melvin man.

 

[melvinmills]

Although this type of answer may make you feel superior, it does nothing to help promote a better understanding of the possible benefits of the annuity market.

Would anyone else like to answer?

 

[HealthGuy]

Melvin: I don't feel superior my man....Just look closely at my avatar. Do you think I care? The gov't isn't changing anything regarding the IRA or annuity market tax wise. Come on again man.

 

[VolAgent]

So, you are worried about the government ignoring the 5th Amendment and taking property without just compensation, but you hope they will decide to ignore one class of assets?

 

[LGilmore]

mel? stay off the blogs you're reading. They aren't helpful.

 

[Bobrobb]

It's a reasonable question although extreme. You have to remember how big the insurance companies are and the billions invested. Uncle Sam usually adjusts deductions and credits. And yes sometimes eliminating some. This one however probably won't be touched for sometime especially since a lot of the middle class are still struggling.

 

[melvinmills]

Healthguy,

If I misread your reply, I apologize to you.
Let me explain the intention of the question.
`1. This was started based on an article in Financial Advisor Magazine. They
were referring to a blog that made this claim. They did NOT imply it was likely
to happen.

2. I do agree that it is extreme and I do not believe it will happen BUT, if some
people’s perception is that it is possible, they may look for an alternative.
As volagent brought up, why would they ignore one asset class (insurance)?
That is the crux of my question.
Is there any reason to believe annuities/insurance products could offer a viable alternative for people
who are worried about their 401K’s or IRA’s?

 

[Larry Tew]

It's not an outrageous question. Based on 2013 market results, there's an estimated $25-30 TRILLION in qualified plan assets... NEVER TAXED.

Confiscation may be a stretch, but the government has absolute control over the tax code that determines how much of one's qualified plan belongs to them and how much belongs to the government. Excise Tax, Success Tax, penalties for taking to much, penalties for taking too little, penalties for taking it too early, penalties for taking it too late...

 

[Norwayguy]

Not a guarantee but why not look back to previous examples of tax law changing such as TEFRA (I believe wasn't around back then) that created MECs policies issued prior to the change were exempt for the changes.