While the folks in Cyprus can lose up to 10% of their bank account balance to help a European of their island nation, many point out that this may happen to us with our 401(k) and IRA accounts.
We are in a financial mess with trillions of debt and no end in sight of paying it off. While some on Capitol Hill talk about replacing 401(k) accounts with guaranteed payouts from the government, we can remember what government did to Social Security. We aren’t Cyprus, at least not yet. There is $5 trillion in IRA accounts and about $4 trillion in defined contribution accounts, we just need to make sure that our government representatives don’t think of our retirement piggy bank as their piggy bank in order for them to pay off the bills that they have run up and will become due.
While we shouldn’t be pulling money out of your 401(k) plans because the sky isn’t falling, we should always be cautious with what Washington has to offer us. Any deviation from our current retirement plan system should be met with skepticism. We’re not Cyprus, at least not yet