Wall Street Journal Reports 401k Withdrawals Frozen or Slowed

by Jake Towne Earthhope Action Network



Caveat emptor. Buyer beware.

"Honey, whaddya do for money?
Yeah, whaddya do for money honey, how you get your kicks?
Whaddya do for money honey, how you get your licks?"

- ACDC, "What Do You Do For Money Honey?"

A May 2009 Wall Street Journal article details that many employees and newly unemployed are having issues with withdrawals and redemptions from their company-sponsored, government-tax-deferred 401k retirement plans. The only employer named in the article is the energy giant BP, but 401k providers listed include State Street Corporation, a major bank, Northern Trust, and Principal Financial Group.

Some investors have found their money either frozen and unable to be withdrawan, or redemption rates much slower than expected. One man was laid off from an undisclosed manufacturing job and was unable to access $40,000 in funds held by Principal Financial Group. "I hate to be whiny, but it is my money," he said.

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Typically in a 401k plan, one must be laid off or resign before having full access to withdrawal funds, but there are, of course, loopholes and rules that vary from plan to plan, and from fund to fund. Typically when funds are withdrawn, especially prior to age 59, they are taxed as income AND taxed a 10% additional penalty.

Even as Madoff is sentenced to 150 years, many have forgotten that there are likely many other Ponzi schemes still out there, whether it's the FED, Social Security or other Madoff investment schemes. And no, the government itself has certainly not yet blocked withdrawals from 401k's - any move by lawmakers to inhibit redemptions would likely cause a panic and populist uproar.

I am not a financial advisor, but I would suggest that it is merely a matter of prudence for any reader with an active 401k or IRA plan to educate themselves on withdrawal methods and confirm that withdrawal lines are still solvent, if you choose to invest in these vehicles and are not already 100% aware. Caveat emptor.

Jake Towne is the Champion of the Constitution



Jake Towne is running for U.S. Congress in Pennsylvania's 15th District in the 2010 election as a citizen unaffiliated with any political parties. Jake also writes at www.LibertyMaven.com and www.CampaignForLiberty.com. A master campaign presentation for internet viewing is available. [Reach the Author Here!]

P.S. You can listen to my most recent interview with "Patriot Pastor" Kinley from last week on BlogTalk Radio. On July 1, 4 PM EST, I will be on live with Ken Van Doren of the Voice of Liberty on www.RevolutionBroadcasting.com.

©2009 Jake Towne, the Champion of the Constitution, all rights reserved. You must have written permission from the author in order to republish this work.

Source: Earthhope Action Network