On Tue, 25 Nov 2008 20:34:20 -0500, Keith nuttle
wrote:

Dave wrote:
On Tue, 25 Nov 2008 15:38:10 -0800, "Capt. JG" said:

If the assets are "taken out" and the taxes are paid, then what becomes of
the reduced assets is a loss.

Why? You haven't sold them. Under your theory, no sale, no loss. And what's
with this "reduced assets?" You moved $10,000 in assets, let's say, from
your 401K to a taxable account at your broker's, wrote a check from your
checking account at the bank for the taxes on that $10,000, and continued to
hold the $10,000 in assets in your account at the broker's. No loss, right?
Another way of looking at it is if you must withdraw say 1000 a year
from you 10000 retirement fund to live. Your 1000 is 10% of you
retirement account. If the market drops by half you must now with draw
20% of the account to get the same 1000 required to live. If the market
has historically returned 10% per year the return on the first scenario
will match what you need to live. In the second scenario the return is
only half of the 20% you need to with draw. In this scenario your
retirement fund runs out in less than 10 years. Who is going to support
these people when their retirement is gone.

Sounds like a very good argument for keeping Social Security as strong
as possible.