401K Plans and IRAs Eyed to Alleviate Fiscal Cliff
The ever expanding debate on averting financial consequences in early 2013 has refocused attention on concerns that the coveted 401 k plan and IRAs, long considered the last bastions of private retirement savings which replaced pensions for most working Americans may be tapped. The plans may be slated for dramatic changes ranging from limiting deductions, to retroactive taxation and to possibly include a nationalization scheme by imposing government mandated plans on employers with savings allocated exclusively to Treasury bonds.
An Investment Company Institute study published this month illustrates that U.S. retirement assets at the end of second quarter 2012, total $18.5 trillion. Two components are 3.5 trillion in IRAs and $5.1 trillion in 401(k) plans. These therefore present very tempting deficit-funding sources for the Obama administration to help close a spiraling budget gap that is approaching $20 trillion.