Congress Considers Axing Your 401(k) Tax Deduction

Congress is considering proposals right now to take away the tax advantages of your 401(k).

To help finance the tax reforms being proposed, Congress is eyeing axing the up-front tax deduction for 401(k) contributions. And one proposal would also change the tax-deferred nature of 401(k)s by imposing a 15% tax on your annual gains.

Why would Congress consider tinkering with the tax benefits of such a popular program as the 401(k)?

For the same reason that notorious holdup man Willie Sutton gave for robbing banks:

Because that’s where the money is!”

The current taxation of 401(k) plans was estimated to have cost the federal government more than $90 billion in potential tax revenue last year alone, according to the Joint Committee on Taxation.

This is NOT the First Time Congress Has Tried to Make Radical Changes to the 401(k)

You see, the government created 401(k)s, IRAs and 403(b)s, which means they can (and do) change the rules any time they want.

This is only one of the reasons that the man credited with being the “Father of the 401(k),” Ted Benna, has been calling it a “monster” that “should be blown up.”

In fact, it caused quite a stir when Ted Benna recently announced that he’s put the lion’s share of his own money into what’s most commonly known as a Bank On Yourself-type plan.

You can learn why Benna believes Bank On Yourself plans avoid the dangers that traditional retirement accounts face in this article.

I’ve Been Sounding the Alarm About 401(k)s and IRAs for Even Longer Than Benna

And I’ve been attacked ruthlessly for that by the Wall Street fat cats who always get paid – whether you win or lose.

Here’s the uncomfortable truth: That whole tax-deferral “carrot” is a scam! (Read “6 Reasons Your 401(k) is a Scam.”)

Have you been told that deferring taxes is a good thing because you’ll probably retire in a lower tax bracket? That’s not what we’re hearing from many retirees who are complaining they’re actually in a higher tax bracket!

That’s happening for two reasons:

  1. The Required Minimum Distributions retirees have to start taking around age 72 – whether they want to or not – are pushing them into a higher tax bracket.
  2. Many people are surprised to discover their income from various sources causes up to 85 cents of every Social Security dollar they receive to be taxed.

As a result, financial planners and CPAs are seeing retirees’ tax rates DOUBLE – or more!

In addition, what direction do you believe tax rates will go over the next 20 or 30 years? 94% of those we’ve surveyed believe they must go up, due to our country’s unsustainable debt and aging population.

Which means that if you’re deferring your taxes and you’re successful in growing your nest-egg, you’re only going to pay higher taxes on a bigger number!

Even if Congress doesn’t take away the tax benefits of saving in a government-sponsored retirement plan like a 401(k) or IRA this time, they could well be successful the next time they consider where to drum up the cash they desperately need to fund the government.

7 Reasons a Bank On Yourself Plan Is the Ultimate Retirement Plan Alternative

Here are 7 reasons why Bank On Yourself beats any 401(k) or IRA:

  1. A Bank On Yourself plan is a private, “unilateral” contract – that means the company can’t change the rules unless you agree to it. That’s the law.
  2. You control the money in a Bank On Yourself plan. There are no government limits on how much you can put in each year, and no restrictions or penalties for “early” withdrawal or for waiting “too long.”
  3. You can use the equity in your plan whenever and however you wish – no questions asked.
  4. Bank On Yourself plans are a supercharged variation of an asset that has increased in value every single year for more than 160 years – including during the Great Recession and the Great Depression.
  5. These plans are taxed like a Roth plan – you put in dollars on which you’ve already paid income tax, and you can access both your principal and gains with no taxes due. (See “5 Tax Advantages of a Bank On Yourself-Type Plan.”)
  6. There are no Required Minimum Distributions to push you into a higher tax bracket … and the income you take is not included when the IRS determines how much tax you’ll pay on your Social Security income.
  7. A Bank On Yourself plan and its growth are generally not reported to the IRS, which also gives you privacy.

Don’t Wait ’til Congress Changes the Rules for 401(k)s and IRAs!

Why not find out how adding Bank On Yourself to your financial plan can grow and protect your hard-earned savings and give you the 7 advantages listed above? Take that important next step TODAY and request your free Analysis here.

There’s no cost or obligation.

Speak Your Mind