How Safe Is Your Retirement Nest Egg?
Before we begin, let me make one thing
clear. I do NOT give tax advice and I do NOT give investment
advice. If you have a retirement nest egg of sufficient value to
peak your interest in this page, then you already have, no doubt,
professionals available to you who are qualified to render such advice.
April 5, 1933, just seventy-five days after taking office, democrat
president Franklin Delano Roosevelt issued Executive Order 6102
forbidding the “hoarding” of gold coin, bullion and Gold
Certificates. Citizens
were permitted to own $100 in coin or
bullion, small amounts of jewelry and teeth. Roosevelt
deliberately used the term "hoarding" to lend an evil
viewpoint to anyone who wished to hold on to his own money. At
the
time, there were two currencies used in the US, government paper money
and gold. Roosevelt paid the citizens for surrendering their gold a
total of $20.67 per troy ounce. In January, Roosevelt issued
another Executive Order declaring the price of gold to be $35.00 per
troy ounce thereby making a 40% profit on the confiscated gold.
Failure to deliver
your excess gold coin, bullion or certificates to the government in
exchange for the government papers money was punishable by fines of
$166,640 (today’s money) or ten years in prison, or
both. Never forget or underestimate the awesome power your
government wields.
Executive Order 6102 remained in power until Gerald R. Ford signed P.L.
93-373 once again legalizing private ownership of gold effective
January 1, 1975.
The government is always looking out for us poor, hapless souls who
lack the ability to care for ourselves or to protect the paltry
assets we have managed to accumulate. To this end, Rep.
George Miller, Democrat CA, chairman of the House Committee on
Education and Labor, held hearings on October 7, 2008 to address the
impact of the current financial crisis on taxpayers 401(k) and IRA
accounts. in prepared remarks for the hearing on “The
Impact of the Financial
Crisis on Workers’ Retirement Security,” blamed Wall Street
for the
financial crisis and said his committee will “strengthen and
protect
Americans’ 401(k)s, pensions, and other retirement plans”
and the
“Democratic Congress will continue to conduct this much-needed
oversight on behalf of the American people.” The testimony
of Teresa Ghilarducci, professor of economic policy analysis at the New
School for Social Research in New York, in those hearings drew the
most attention and criticism. Testifying for the House Committee,
Ghilarducci proposed that the government eliminate tax breaks for
401(k) and similar retirement accounts, such as IRAs, and confiscate
workers’ retirement plan accounts and convert them to universal
Guaranteed Retirement Accounts (GRAs) managed by the Social Security
Administration.
These private pension plans hold $3 Trillion in assets and the
government feels obligated to protect the citizens and provide the
security and wisdom of the congress and the Social Security
Administration.
If Congress does nothing, the death tax will be resurrected at 55
percent after a $1 million exclusion. According to the Wall Street
Journal, Democrats wish to restore last year’s 45 percent death tax
beyond a $3.5 million exclusion. Republicans seem to prefer a 35 percent
death tax above a $5 million exclusion.
The top 1 percent of earners
provide 40 percent of that tax's receipts; the top 5 percent provide 61
percent; the bottom 50 percent provide 3 percent. So the tax makes a
substantial majority complacent about government's growth.
The governments are all sharks now. Eating everything in existence until there is no more.
You
don't think this will sooth the savage beast do you? Please, once the
government/squid has it's tentacles into this fresh new source of
"capital" don't you think they'll want more?
"In
the absence of a gold standard, there is no way to protect savings from
confiscation through inflation. There is no safe store of value. If
there were, the government would have to make its holding illegal, as
was done in the case of gold.
Your
Retirement Plan Will Soon Become Washington's ATM Machine, says Ron
Holland: "Today over $15 trillion is sitting in tax-favored retirement
plans, including $4 trillion in IRA accounts. Retirement savings make
up 35% of all private assets. Washington is broke, the deficit is
soaring and Congress simply can’t wait for Americans to retire so they
can start taxing these funds. The politicians are tired of waiting;
they need your money now."
Reports
out of Washington indicate that new retirement annuities may be
promoted by Obama aides. This is just the beginning! The question every
successful American with substantial retirement assets must ask is
"what will you do if our retirement funds are forced to become the
buyer of last resort for US treasury obligations?" Unless you believe
Congress and Washington bureaucrats will do a fair job of allocating
and distributing your personal retirement assets between yourself and
others, you must begin now to protect your assets.
… The largest source of liquid private wealth remaining in the United States is the $15 trillion in private retirement funds.
You
will also eventually find your existing retirement funds forced into
the government program and you will lose your ability to invest and
protect your retirement funds outside of the dollar, government bonds,
and the US investment markets at some time in the future.
Your
money? Oh, you mean *false* money that is actually debt in the form of
federal reserve notes? Your mistake is the same as most people make. A
dollar is not a unit of WEALTH. It is a unit of DEBT.
Ah,
there is a much easier, non rabble rousing inciting way to stealth
annex your future 401k/Ira income stream. Remember that the future
income flowing from them provides tax revenues with the exception of
the Roth.
No, the first step will be to means test SS, and make
all income from retirement, including Roths(dems never liked them), or
any other source applicable for reducing SS payments. It would be
really easy to have SS payments go down once income hits $30,000,
phasing it out by $50,000.
It works really well, reduces SS
payments by the government in the future, and still have access to tax
revenues of the retirement accounts.
Hell, both Repubs and Dems would be for it.
That's your first step
As
the U.S. Social Security system moves ever closer to bankruptcy, the
billions of dollars Americans have saved in their private retirement
accounts will become an increasingly tempting target for our
politicians.
A government raid on private retirement funds
wouldn’t necessarily take the form of outright confiscation. It could
take the form of mandatory conversion into government accounts, where
the government would determine how much money retirees could receive.
Or it could take the form of, for example, a 40% surtax on
disbursements from 401(k) balances over $1 million — on the grounds
that it would only harm wealthy “millionaires.”
But regardless
of the precise method employed, the basic principle would be the same:
Your money would no longer be your money. Instead, the government would
claim the right to redistribute your wealth to pay for others’
retirement on the grounds that they needed it more. In essence, the
government would be implementing the Marxist principle: “From each
according to his ability, to each according to his need.”
Many
Americans are predictably alarmed at this prospect. One of my friends
who I’ll call “John” is a hard-working middle-class professional who
has lived frugally, saved enough to send his two children to college,
and has carefully built up a nest egg sufficient to ensure that he and
his wife will have a comfortable retirement. In contrast, his neighbor
George making the same salary has chosen to spend his income on fancier
vacations and a more extravagant lifestyle, rather than saving for the
future. John is understandably outraged that the government might
someday tax or confiscate his nest egg to guarantee George’s retirement
income regardless of George’s bad choices.
American
expats have long complained that the United States is the only
industrialized country to tax citizens on income earned abroad, even
when they are taxed in their country of residence, though they are
allowed to exclude their first $91,400 in foreign-earned income.
A New Transaction Tax
Earlier this month, Rep. Peter DeFazio
(D., Ore.) and others in the House introduced a bill, Let Wall Street
Pay for the Restoration of Main Street Act, that seeks to impose a tax
of around 25 basis points on securities and derivatives transactions.
The
burden of paying the tax would fall on investors. Also, a transaction
tax would make most high-frequency trades unprofitable. This could lead
to a scenario where traders realize it’s easier to conduct transactions
overseas than in the U.S., and trading volumes will drop here, and that
will make it harder for investors to get in and out of investments,
says Rotblut.
Wealth is illusory if it involves a claim payable in dollars which are
but a claim on an insolvent central bank backed only by its ability to
print more debt.
If the ECB were to tie the Euro
to gold, it would have to do so overnight and all at once. That would
mean the game of borrowing and inflating paper and electronic money
would be over. In an instant, the world’s trading powers would start to
use that new currency and dump their fiat ones, because after all who
wants to hold a piece of paper backed by pieces of paper when they can
hold a piece of paper that is a warehouse receipt for a that much gold?
In
1932 a one ounce gold coin was $20 (Twenty dollars). The spot price was
$20.69 and had been approximately so for a hundred years. Roosevelt
devalued the dollar to $35 in 1933 and it stayed there until the US
went off the gold standard and began issuing fiat currency in the
nineteen seventies. (When a gallon of gas was twenty cents, the average
home price in Southern California was under $20K and a new, fully
loaded, full sized American car was around $4K)
Yes. I think
gold may well hit $5,500 per oz. Or more properly, the dollar will sink
to $0.0036 compared to its value at the inception of the Federal
Reserve.
BTW, the current value of the dollar, compared to its
value from the inception of the Republic through 1932 is $0.018. Not
quite two cents
In recent months, the current democrat President Obama, has seized the
bulk of the banking industry, significant portions of the financial
markets and insurance industries, Chrysler Corporation, General Motors
Corporation and now has begun his move to nationalize the American
health care industry.
The Medicare Payroll Tax Would be Extended to Unearned Income and Increased on Wages above $200K for Individuals
(AP)
High-income families would be hit with a tax increase on wages and a
new levy on investments under President Barack Obama's health care
overhaul bill.
For the first time, the Medicare payroll tax
would be applied to investment income, beginning in 2013. A new 3.8
percent tax would be imposed on interest, dividends, capital gains and
other investment income for individuals making more than $200,000 a
year and couples making more than $250,000.
The bill also would
increase the Medicare payroll tax by 0.9 percentage point to 2.35
percent on wages above $200,000 for individuals and $250,000 for
married couples filing jointly.
Lawsuits - Is the answer in one word. The undisputed world heavyweight
champion of civil litigation is the USA. The USA has one lawyer for
every 265 people, counting men women and children. If you just counted
adults it would be much lower. For a perspective Japan has one lawyer
for every 5,800 people. There are over 1,000,000 lawyers in the USA
(exact figure is 1,143,000, source is ABA year of 2007). In 2008 it is
projected that 15 million civil lawsuits will have been filed in the
USA in the state courts alone. This is about a 1 in 18 chance of
getting sued but if you reduce this to only take into account adults
since it is rare a child gets sued, then it gets to about one in ten or
a 10% chance of getting sued (approx). Then one must add into this
figure the amount of litigation filed in the Federal courts, which
would be a much lower figure but still makes things worse. Don't think
that this phenomenon just applies to the USA because it is happening in
many other countries.
Number of Lawyers per capita in Various Countries
* Brazil - 570,000 Lawyers or 1 for every 325 people.
* Spain - 114,000 Lawyer or one for every 400 people
* Italy - 121,000 Lawyers, or one for every 490 person
* UK - 150,000 Lawyers, or one for every 400 persons
* Germany - 140,000 Lawyers, or one for every 593 persons
* France - 45,000 Lawyers, or one for every 1400 persons
What is wrong here is that nothing in the USA can protect you from an
aggressive judge who feels your assets should be seized to satisfy some
sort of debt or perceived debt. You are subject to the mercy of any
Judge who may or may not be following the law. Now if the Judge over
steps his bounds you are faced with paying massive legal bills to
correct the situation in the appeals process. Your odds of winning an
appeal are probably under 1%. Ask some of these law firms that do these
asset protection structures what their rate per hour is going to be to
try and protect your assets if they come under attack from a financial
enemy of yours. Figure on rates starting at $325.00 per hour (very low)
and going up to $1,250.00 per hour for a partner in a top-drawer law
firm in the USA. Ouch.
That's the way I see it.
May 26, 2009
end