7 Ways to Sabotage Your 401(k)

As we've saved in 401(k)'s over the years, we were always told tax RATES we'd pay upon redemption would be less than what we are paying, now. When inflation gets brutal (as it must to pay for the ongoing wars and enormous increases in the costs of everything due to our oil crisis --- and because we cannot be taxed enough to end this dilemma), we will be hit with (1) less purchasing power with the money saved for retirement and (2) HIGHER TAX RATES which will be as much as the public will allow.

Furthermore, we cannot flip from traditional retirement accounts to Roth accounts without creating a huge tax liability, now, on top of the earnings taxes we already pay on wages and salaries. Having identified this problem I'd now like to suggest a solution: Either (1) allow the change from traditional savings into Roth accounts AT THE TAX RATE BASED ON OUR CURRENT INCOME LEVELS WITHOUT ACTIVATING THE ALTERNATIVE MINIMUM TAX or (2) calculate a tax rate at redemption based on the AVERAGE RATES OF EACH YEAR WE SAVED IN OUR PLANS (INCLUDING THE YEAR REDEEMED).

Better minds than mine can probably improve on these ideas or introduce other thoughts on the subject. But unless these problems are addressed as soon as possible, financial hardship will result for millions who saved faithfully to support themselves (and believed in the advice we were given). The last thing this country needs is for the Boomer generation, who by and large did what we were supposed to do, to become a big liability to the generations after us (who already know they will be financially plundered as Social Security, Medicare and Medicaid collapse under their own weight. Can this be put on the table for discussion?

Roderick Doyle of MO 10:48PM June 23, 2008