Letter: Conressional proposal puts 401(k) tax breaks in jeopardy

July 24, 2013 

Have you read about Congress considering a plan to redirect 401(k) tax breaks to a new government system of guaranteed retirement accounts into which all U.S. workers would have to contribute?

The concept eliminates the tax breaks on 401(k) contributions and earnings. Instead, all workers would get a $600 annual inflation-adjusted subsidy from the U.S. government. The sum would be inflation-indexed.

Workers then would be forced to invest 5 percent of their pay in a guaranteed retirement account administered by the Social Security Administration. That money in turn would then be invested in government bonds that would pay a teeny 3 percent a year, adjusted for inflation, less than half the inflation-adjusted 7 percent return the stock market has delivered. Wow -- what a deal.

By the way, do you recall that in early 1968, President Lyndon Johnson made a change in the budget presentation by including Social Security and all other trust funds in a "unified budget," which effectively let government use Social Security funds for its overall budget needs? Double wow.

KURT LEWIS, Richland

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