After yesterday’s marathon RANT – and Webinar to boot – I am thankful to present a “guest speaker of sorts” for today’s topic. The below article by Ron Holland, though written in March 2011, is an excellent synopsis of the upcoming “confiscation” of U.S. retirement plans I have written of for some time now – perhaps in other nations as well.
Americans: Here’s How to Protect Your Retirement Assets From Coming Gov’t “Confiscation”
The article does not mention everything I have discussed, and I do not agree with all its investment recommendations. For example, while recommending gold bullion, which I whole-heartedly concur with, he also cites Euros, Swiss Francs, foreign annuities, and mining stocks, which all possess their own set of risks, in my view.
However, he completely understands the issue at hand, the upcoming confiscation – or “confiscation” as he calls it – of U.S. retirement assets via “Guaranteed Retirement Annuities,” mandatory investment into “preferred assets” (such as Treasury bonds), heightened fees and taxes (income, withdrawal, and/or death), surreptitious (or not-so-surreptitious) monetary inflation, increased retirement age, and/or reduced account liquidity (increased withdrawal restrictions).
There are few issues I feel as confidently about as the likely confiscation of U.S. retirement assets, such as 401ks, IRAs, 403bs, Keoghs, pension plans, and even Roth IRAs. Such schemes were actively discussed in Congress during Global Meltdown I in late 2008, and are sure to be re-considered upon commencement of the next major crisis, be it – per Holland’s prediction – a U.S. rating downgrade (occurred, with additional downgrades imminent), unforeseen terrorist attack or military event (Iran, anyone?), or renewed economic meltdown (ongoing, with potential “flash points” everywhere).
House discusses 401k/IRA confiscation – November 2008
Last year, at age 40, my wife and I cashed out our IRA plans, paying all required taxes and penalties, and cannot be happier with the decision. Hopefully my ongoing commentary, and the contents of this article, will convince you that such a decision is integral could be integral to your family’s future well-being, potentially a financial “life or death” event.
PROTECT YOURSELF, and do it NOW!
Andy,
I have been reading your “rants” for a few months now, while I don’t agree with a majority of them, I do however agree there will be a serious problem with retirement “confiscation”. I have a simple SEP IRA in which I stopped contributing too a few years ago and put that cash into physical gold and silver. My wife on the other hand has a company sponsored 401K. The account is only a few years old with less than a $50k value. I have convinced her to stop contributions to it and now I’m trying to convince her to cash it out. This is where I need some assistance! I’m dead set on cashing it out and using the remainder to pay off all outstanding debts, as in credit cards and misc. debt. I feel strongly that in a credit crisis “Armageddon” that seems inevitable with the continuous corruption by our Government puppets, we would be in much better shape financially along with the nice cache of gold and silver bullion I have been a consistent buyer of week in and week out regardless of paper price. Can you give me any words of ‘wisdom’ for the ‘better half’? Thanks much!
Jeff,
Thanks so much for your confidence in me.
Regarding your wife, unfortunately it is nearly impossible to cash out a 401K until you leave your job, at which point you can do so immediately.
Unless you can claim “emergency cash needs,” I do not believe a 401k can be cashed out.
Otherwise, I have the same advice for her as I did for my wife, who thankfully listened:
CASH OUT ALL GOVERNMENT-SPONSORED RETIREMENT PLANS AND BUY PHYSICAL GOLD AND SILVER!
Andy
I am not sure the U.S. government could get away with confiscation of retirement funds without citizens waging a full fledged revolution to stop it (although the citizens do let the government confiscate their wages). I think the feds would first sell off or lease assets like ports, land, monuments, etc. Still, it is worth considering cashing out my retirement funds. Except, where to put the money?
This would not be a popular decision, but far from a “10” on the “1 to 10” scale of what desperate governments have done in the past.
As for where to put the “money,” put it in REAL MONEY, i.e. PHYSICAL gold and silver!
Andy
Thank you for the response Andy. You are correct, I went to the bank which manages my wife’s and her companies 401k portfolio and learned of the absurd rules about cashing in your retirement accounts. The only option I had was to borrow 50% of the vested balance at prime +1% for up to 60 months. What a damn shame! The only exceptions the IRS allows are for “financial hardships” and I asked the banker if he thought what happened to MFGlobal clients money and what the Government is currently doing to our financial system is enough of a hardship. While he agrees with me, or so he claimed, nothing can be done. There was 1 other option I guess and that was to convert the 401k into an IRA but that also requires a penalty fee and a financial hardship reason. Makes absolutely no sense to me what so ever and I am very pissed off to say the least! I proceeded to inquire about allocating some of the funds into a gold or silver backed trust. His response was GLD or SLV and I think he was ready to take an early lunch after I presented him with my opinions on both of those ETF’s. So to make a long story not so long, the heading to your article has already somewhat taken affect. There is not a damn thing a person can do with their retirement accounts (401k) unless you are on the verge of being homeless or you are jobless. So if a person wanted to be pro-active, the Government would rather you be re-active when it is already to late! Talk about tyranny in disguise! The investment banker I met with today seemed to have somewhat of a grasp on the “real world”. We discussed the government’s fabricated and inflated economic numbers from GDP thru Unemployment to Inflation. It is rather startling when you hear a banker warn you of the upcoming hyperinflation we will experience. Anyway, I’m not going to give up on this 401k issue! It is just morally wrong and takes away the power of the people do decide what is right for them financially. Thanks again Andy for the reply and the time and effort you put into your “rants”. By the way, I will try to forget that you voted for Obama last election, everyone makes mistakes but I never thought it would have ended up with Mr.Obama as President of this once great Country! 🙂
Jeff,
Your welcome, but there is certainly a way to get out of 401K’s – leave your job, at which case you can convert to a rollover IRA penalty-free and immediately cash out (paying taxes plus the 10% fee). Of course, I’m not giving you advice on that issue.
As for Obama, I made it quite clear that I only voted for him to get the monster neocons out of office, just as I voted for Kerry before that and Bush before that – not to mention, Ross Perot in 1992. Obama has done everything Bush did, to a tee. Aside from Obamacare, they are twins.
Can anyone truly say with a straight face that America would be better off with McCain? My biggest issue with him – among MANY – was that he was a warmonger, and one with nothing to lose given his age.
If you think things are tense with Iran now, picture McCain in office.
Andy
You do make a solid point with McCain being a warmonger. I admit to being a little enthused with Obama in his campaign but like most puke politicians, what a bunch of lies! I voted McCain just because at that current time, I had more faith in him vs. Obama when it came to defending our homeland. We need to get the hell out of the middle east and every other country we occupy and spend that money here at home. I fear it is far to late for that and WW3 seems imminent. I just don’t see why we wanna piss off Russia and China by striking Iran all for the sake of Israel. That is our creators homeland yes, but nothing written in our constitution states we need to be their savior. I’m a firm believer in my faith and I know the man upstairs will make final say. Take care Andy!
Jeff,
Like Ron Paul, I believe firmly we need to get the hell out of all foreign lands. The only reason the homeland needs to be protected is because we have pissed off the entire world.
That said, the less army the better. Only problem with that is we have 3 million soldiers with no other skills and a horrific economy, so if we brought them home unemployment, welfare,and crime would soar further.
Andy