You most certainly can close a 401K and cash it out.

You do take a 10% hit and you have to pay the taxes on it but otherwise you can do it.

Okay, there is validity to this story.

First, December 07, 2001|From Bloomberg News, BUENOS AIRES — Argentina, which is defaulting on its debts, said it will seize $2.3 billion of retirement savings by forcing private pension funds to transfer the money to a state bank in exchange for Treasury bills.

Second, http://edlabor.house.gov/testimony/2...hilarducci.pdf

Okay, so if House testimony is boring, then see 3:

Third, an article that helps summarize: House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created "guaranteed retirement accounts" for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, said that since "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."

Source: Would Obama, Dems Kill 401(k) Plans? - Capital Commerce (usnews.com)

So it's not from left field, well it is, but actually it might be left of left field and people's problem was that she was invited and the idea entertained by George Miller for the purpose of generating tax income. Talk about killing the golden goose.

I think she's Buzz's favorite too. Remember when he was on FNC a couple months ago?