Wisdom from The Action Wisdom In Action

This Just In: More Retirement Disasters

From Martin Weiss Research. An article showing how truly dismal retirement savings rates are. Well, when you don't have a job, and/or have taken withdrawals from retirement accounts just to stay alive, what else can you expect?

Of note: Uncle Sam Might Want Your Social Security Checks!

As reported in a recent Wall Street Journal, a small part of the 2008 Farm Bill will now allow Uncle Sam to withhold Social Security funds from anyone with outstanding debts, even if those debts are ten years or older.

This new legislation applies to a broad category of outstanding debts, including farm and small business loans, and a similar statute of limitations was lifted on student loans in 1997. In other words, only income taxes continue to remain covered by a decade-long limitation.

Now, don’t get me wrong. If you borrowed money from the government, I think you should be held accountable until it’s repaid. Otherwise, the rest of us are simply footing the bill for your irresponsibility.

And I absolutely don’t think you should receive another dime out of any program until those debts are repaid! If anything, the fact that Treasury can only withhold 15 percent of benefits (down to a minimum monthly payment of $750 in all instances except owed income taxes) makes little sense.

But there are three important things I’d like to note about this new legislative twist …

First, the fact that Washington is coming after this source of revenue so aggressively demonstrates just how desperate they are to get more money into Social Security’s coffers.

Second, regardless of morality, it’s going to mean more retirement pain for many Americans.

Third, this is the government we’re talking about, which means there’s big potential for abuse and mistakes surrounding the new legislation.

In fact, the Wall Street Journal article goes on to talk about a couple examples of the “sometimes-Kafkaesque process debtors can face when challenging the validity of a claim.” It’s truly scary stuff!

There goes Social Security--and they didn't even have to shut the program down! This is more proof that what the government gives you, they can also take away. It's bad enough the IRS can get ahold of any money you have to your name, but now Social Security? I wonder if it gets reported on your credit record (the IRS doesn't unless it's a lien).

Posted by Cute at 8:25 PM

Labels: economy, financial (non-tax), taxes