Retirement Accounts at Risk?

Retirement accounts may be at risk as they continue to linger in the government's cross-hairs.

Back in 2008, as the world's markets teetered on collapse and the stock market nose-dived, Congressional hearings were held during which a professor from the New School of Social Research in New York City recommended that the government essentially take over all retirement accounts. Her testimony received little coverage and commentary in the general media, but a fair amount from conservative sources who were alarmed at the idea that the federal government would a) take control of people's personal assets; b) force people to deduct a percentage of their earnings for retirement savings; c)  decide how the money should be invested.

In addition, since then, various proposals have been discussed which recommend that all retirement accounts no longer be allowed to invest in anything but government securities - specifically US treasuries. Again, this would be done by government fiat, without any input or decision by individual investors.

I've been considering how likely these scenarios might be. I don't doubt government's desire or ability to do something like this. Among the reasons they might would be that they would get access to trillions of dollars of assets that they could use to either pay down a percentage of the national debt, or spend on government programs. The way they would get this money is by taking it from retirement accounts and replacing it with US treasuries, a debt obligation of the federal government. I don't know about you, but I would not be happy if the government took my assets and gave me their treasuries bonds in exchange.

On the other hand, I've balanced this nightmare scenario against the simple fact that I can't imagine Wall Street "allowing" this to happen. They make billions in fees from the products they provide which many people use in 401ks and other retirement accounts. They contribute millions to political campaigns and spend millions more lobbying Congress.

But still, I wonder whether the government might just go ahead and grab the retirement money anyway. My reasoning is that governments - when pushed against a wall - will do anything it takes to preserve their power. And maybe they would concoct some sort of compromise with their Wall Street benefactors (masters?).

So, having not yet made up my mind on this issue, as far as how I might deal with it (ignore it, cash in my retirement assets so there's nothing to seize, some combination of the two...etc.), I came across this new wrinkle:

The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency’s first foray into consumer investments...

You should read the rest of this article (click HERE) to get a feel for another possible way government might devise for getting their sticky fingers on your money.