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This regards the alleged notions and rumors that the government can seize your entire IRA or 401K to pay itself. The answer is a resounding N-O \u201cNO\u201d.\u00a0\u00a0https:\/\/cashmoneylife.com\/can-the-us-government-seize-your-401k-or-ira\/<\/a><\/p>\n There has to be a federal tax lien against YOU to allow the IRS to seize anything in a pension or retirement plan that is taxable.<\/p>\n What has happened in Ireland, France, Argentina and Hungary is the basis for and source of these rumors. However, as the author of this article clearly indicates, such a law would require an act of Congress, and end up in the Supreme Court.<\/p>\n From the article:\u00a0 \u201cEvery few years there are rumors that a particular administration wants to seize private retirement funds, and so far it hasn\u2019t happened. The rumors come in different flavors and several ideas have even been proposed before Congress. For example, the Clinton Administration proposed a one time tax against the value of private pensions, 401k plans, and IRAs.<\/p>\n A more recent proposal involves seizing and converting a portion of privately held assets into\u00a0US Treasury bonds<\/strong><\/a>. A more extreme proposal is a true government takeover of retirement plans which involves seizing private retirement accounts and converting them to government-sponsored annuities that would guarantee an annual income for all Americans. – article<\/p>\n Read the entire article. There is more to it than just grabtastic antics by the US government, and before anything like that might happen, remember that it would also be applied to the politicians who might vote in favor of such a stupid ass idea. That would be the perfect opportunity to remind those bozos that you voted for them (even if you didn\u2019t) and they had better vote against it if they want to keep their jobs.<\/p>\n Also, remember that Social Security Retirement Income is taxable income<\/em>. It may be taxed at 50% of the annual total, but it is still taxable and you have to take that into consideration when you do your tax return in January (or April or whatever). It might make more sense, if the SS Trust Fund is running out of cash, to tax earned income to 100% of its total, and even un-earned income, such as interest on bonds and stock dividends could contribute to the SocSec Trust fund substantially if they were also taxed as ordinary income. Would that deal a blow to the stock market? No. It would only piss off investors who pay no SocSec tax on investments.<\/p>\n I do not know if it would take an act of Congress to do this, but it might be something to consider as a means of easing the drain on the SocSec Trust Fund. (Don\u2019t start with me, Hondo!)<\/p>\n The other part of this freak-out rumor-mongering, that the USGov will somehow seize your savings, meaning your savings account \u2013 and I have yet to find a valid source for that rumor \u2013 is based on pure ignorance. If you have a standard savings account, it is usually an interest-bearing account. This is what is called \u201cordinary income\u201d as opposed to earned income. It is subject to taxation, but at the same rate as taxes on dividends from investments, and that is clearly outlined in the guides to taxable income that the IRS puts out. You can also ask them directly what the percentage rate is for taxing ordinary income, but I think it\u2019s on the tax form that you fill out when you do your taxes and whine about how much Uncle Sam is getting from you. And frankly, since most checking accounts now pay interest on deposits, that $.035 per quarter is something you should report, just to stay honest with the Revenooers.<\/p>\n Some income is nontaxable, but is clearly defined as that. And below a specific level, you don\u2019t pay taxes, anyway, as the standard deductible posted on your tax return clearly indicates. This year, it was $12,000. Next year (2021), it may change so keep an eye on it.<\/p>\n In regard to your savings account, you may or may not remember that the Glass-Steagall Act of 1933 was dismantled during the Clinton administration, and the Obama administration signed the Dodd-Frank Act into law. Under Dodd-Frank, if the bank is in financial trouble it can \u201clegally\u201d seize your meager funds and give you what one would loosely term an IOU (credit).<\/p>\n