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Financial Repression Coming to America (LIP p/hank)
Warnings from El-Erian. Sees government repressing folks ability to grow savings. Got a new tax on pensions here in Michigan that didn't exist before. Can debate the merits, but bottom line is its gonna cost seniors plenty over remaining lifetimes. Any one mainly in cash for many years surely feeling the pinch. *&%@*!# Cant pick up a decent apple tomato or pepper in the grocery here w/o forking over a buck. What inflation?
I think the question becomes how much can the lower/middle class be squeezed. I think there continue to be structural problems with the economy and that things will not improve until they are addressed, bu what can you do.
Hi Mo, Currently all pensions are exempt, government and private alike. But, 401k/403b, etc. are not exempt, except for employer contributions and whatever portion you contributed to receive an employer match, as I understand it.
Under the new law which goes into effect in 2013 all pensions except military are subject to our 4.35% income tax. So much h*** was raised they went back to the drawing board and scaled it in as follows. If you were born before 1946 you are exempt for life. (I just missed) Theres a middle group spanning about 5 years who will pay tax on everything except the first 20 K for life. The third (younger) group will pay on 100% for life. Social Security remains exempt, for now anyway.
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But, 401k/403b, etc. are not exempt, except for employer contributions and whatever portion you contributed to receive an employer match, as I understand it.
Under the new law which goes into effect in 2013 all pensions except military are subject to our 4.35% income tax. So much h*** was raised they went back to the drawing board and scaled it in as follows. If you were born before 1946 you are exempt for life. (I just missed) Theres a middle group spanning about 5 years who will pay tax on everything except the first 20 K for life. The third (younger) group will pay on 100% for life. Social Security remains exempt, for now anyway.
Convoluted for sure. Hope answers your question.