Has The Government Takeover of Your Retirement Account Already Started?

Has The Government Takeover of Your Retirement Account Already Started?
This is the title of one of the latest gloom and doom email campaigns.  I had a client send this to me and thought I would comment on it.  The email is short and sweet claiming that the government has already started the process of confiscating retirement accounts.  Here is a portion of that email:
It’s happening now, as you read this, in California, Connecticut, Illinois, Massachusetts and many other states.
These states are forcing millions of Americans into government-designed retirement plans (yes, the same government that’s in the process of destroying your Social Security safety net).
Meanwhile, Forbes reports that Richard Cordray, director of the federal government’s Consumer Financial Protection Board, has been discussing whether, due to the “mismanagement” of our individual IRA and 401(k) accounts, his agency might legally step in.
As reported on Forbes.com, “Cordray’s agency is already moving toward regulating 401(k)s and IRAs.”\
Can You Stop This Government IRA and 401(k) Seizure?
Yes, you can, but you need to move fast to get your IRA or 401(k) out of the reach of greedy state AND federal government agencies.
 
 
Richard Cordray was an Obama appointee and very controversial.  In fact, Trump is rumored to be firing him as he guts that agency.  In regards to his quote, I went on Forbes.com and couldn’t find any article dating back to 2011.  He appears to be quite the socialist so I am sure that they would love to nationalize retirement savings.  Now whether he said it or not is another issue.
There has been a small group of people trying to gain support for nationalizing retirement accounts by the government. Dr. Tereasa Ghillarducci has been heading up a movement for almost 10 years to nationalize retirement plans.  Her message is getting the attention of a handful of extremist politicians.  However, that is it.  She certainly isn’t gaining ground on the idea.
They claim that Gold in your IRA would make you exempt from a confiscation.  That is the furthest from the truth.  If the government were going to confiscate retirement plans there would be no assets out of reach.  The reality is  two fold.  First, there is no question that the government would love to get their hands on the trillions of dollars of retirement money.  It certainly would solve a lot of problems although it would create new ones. However, the likelihood of that happening is so small.  Second, these gloom and doom marketers are just trying to scare you into buying gold.  If this were truly happening it would be front page news.

Will We Really Save Money with President Trump’s Tax Proposal?

Will We Really Save Money with President Trump’s Tax Proposal?

President Trump is aggressively tackling many big projects. He wants to increase defense spending by 54 billion, he wants to aggressively cut taxes, and he wants to spend billions on infrastructure spending. He wants to do all of that without raising the deficit. Say what?

So, is he really going to significantly cut taxes? If you haven’t figured it out by now, President Trump is a master at the optics. He wants to control what people see and believe. He will say things over and over until people accept it. His tax proposal might be more like watch the right hand, keep your eye on the right hand, and don’t pay attention to what the left hand is doing.

If you reduce the tax brackets while taking away current tax deductions, do you really get a tax break?

The nonpartisan Joint Committee on Taxation, the official scorekeeper for Congress, wrote an article that details out what might be going away.

Some of the current tax breaks they mentioned:

HEALTH INSURANCE BENEFITS

Think of all of those people that get health insurance benefits from their employer. The value of those insurance policies is exempt from taxation. It would save tax payers $155 billion in 2016. They say that tax deduction is in danger of getting eliminated.

STATE AND LOCAL INCOME, SALES, and PERSONAL PROPERTY TAXES

Roughly 443 million families deduct state and local income, sales, and personal property taxes from their taxable income. It saved $70 billion for tax payers in 2016. They say that is in danger of getting eliminated.

MORTGAGE INTEREST DEDUCTIONS

Nearly 34 million families claimed the mortgage interest deduction in 2016 saving an estimated $65 billion.  This probably won’t go away.  However, they say it could be modified.

PROPERTY TAXES

Nearly 35 million families deducted their taxes on their home or other real estate from their federal taxable income in 2016. They saved a total of $33 billion.

This would hurt in States like Texas where property taxes are so high versus having a state income tax.  It is estimated that deduction is going away as well.

So the optics would be focused on the lowering of the tax rates.  On the surface that looks good. The question is how much will the elimination of some of the more popular tax deductions offset that saving?  The bigger question with almost 20 trillion dollars in debt and the fact we are borrowing almost ½ of every dollar we spend…..can we afford reductions in the tax code?

NASFAA’s 2016 Higher Education Tax Benefit Guide Can Help During Tax Season


Don’t Get Ripped Off at These 24-Hour Emergency Room Facilities

I wanted to share this Ask Bob email so that you are aware.

Bob,

Just wanted you to know my daughter who went to Elite Care got billed over $3,000 for a pretty standard exam. She knows now if she can’t wait to go to a Urgent Care , etc.,  to just go to the Emergency Room since it would have been less expensive. They suckered her in by saying her insurance was accepted and would cover it. Wrong! At least she has met her deductible early in the year. I know it is not but it almost feels like fraud.

If you have an urgent need, urgent care places are much better than these stand alone 24-hour emergency rooms. There is a reason that these are on every corner. They are obviously big money makers. Of course, that is at the consumer’s expense.

 If that is the only option, make sure you get an estimate of the cost up-front. If the staff tells you that insurance will pick up the cost, quiz them and get specifics. In fact, I would get it in writing.

I learned my lesson the hard way two summers ago. I had to take my son for a separated shoulder. It was July 3rd , late in the afternoon, and I didn’t think it could wait. Twenty minute visit and one x-ray created a bill for $1,900.

Taking the Right Steps to Protect Yourself from Credit/Debit Card Fraud – Prudent Money Show – February 23, 2017

Play

Taking the Right Steps to Protect Yourself from Credit/Debit Card Fraud

Bob uses the results of a recent survey to illustrate that the consumer might be confused on the best way to preventing fraud. In fact, the steps they think they are taking as prevention is actually increasing their risks.

 

Why I Don’t Like Debit Cards and Digital Wallets

Why I Don’t Like Debit Cards and Digital Wallets

Fraud is rampant and on the rise and consumers are concerned according to a Capital One Rewards Card outlook. Compromised credit cards and associated data breaches continue to be a problem. In fact, over the past two years (2014-2016), data breaches worldwide rose 46 percent from the year prior (2013), according to creditcard.com.

In reading the results of the Capital One Survey I came to one conclusion. Consumers don’t have a good grasp on how fraud works. Here are some of the results:

“43% said that fraud protection is the most important thing to them when picking a rewards credit card.”

I get two interpretations from this survey. First, credit card companies don’t have the sophisticated fraud systems that immediately detect when fraud is occurring. Credit card companies can detect unusual patterns. That is about it. However, it sounds great in the marketing and shouldn’t really factor into the decision to apply for a card. If there is unauthorized use of your card, you call the credit card company and that takes care of it. It isn’t rocket science.

Second, if fraud protection was one of the most important aspects of picking a credit card, then why do so many people use debit cards?

It is pretty easy to correct a problem with a credit card. In most cases there is zero liability and no time constraints.

Debit cards on the other hand are a different story. There is a limit on the amount of time that you must report the fraud. If you miss that window you could be out the money. In addition, if someone breaks into your bank account, you could have major financial problems such as a period of time where you don’t have access to money, checks and payments that bounce, and time invested in getting it cleared up. There is a sense of urgency when it comes to debit card fraud.

Think of it this way – would you rather have someone use your credit limit temporarily or use your money?  Yet, consumers act as if this is not a threat.

A recent survey showed that at supermarkets, gas stations, discount stores, and dine-in restaurants, consumers either use their debit cards as much as their credit cards or they use their debit cards dramatically more than credit cards. For example 50% of those who were surveyed use debit cards in grocery stores versus 31% use credit cards.

The Preference of the Digital Wallet

Nearly 40 percent (39.8%) of rewards card holders would rather keep their cards in a mobile wallet. Digital wallets are of particular importance since 39 percent of survey respondents thought they lost or misplaced their credit card this past year.

Does a digital wallet solve some of these problems? There are two major problems with digital wallets. First consumers lose their credit cards and are probably more likely to lose their cell phones. Second, someone hacking into your phone and stealing personal information is much worse than an unauthorized use of a credit card.

I did a Google search on this topic. Articles from consumers not securing their phones to consumers lose $30 billion worth of cell phones a year to Smart Phone thefts rose to 3.1 million. I think you are creating more risk by using the digital wallet.

If you want to reduce the impact of fraud, consider two simple steps:

  • Stop Using Debit cards – If you have the luxury of having a credit card as a payment card only, consider this advice. Besides the fact that the unauthorized use of a debit card carries higher consequences than credit card fraud, debit cards do nothing for your credit score like the positive activity of a credit card.
  • Check your credit card statements monthly for unauthorized charges. That is just a good habit.

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