Over the past year I have written several times about the potential for the US government to nationalize private retirement accounts like IRA’s and 401k’s. If you aren’t including your retirement accounts in your asset protection planning, you are fooling yourself into thinking they are safe. Of course I know you all think, “That would never happen.”
Think not? In recent years the governments of Argentina, Hungary, Bulgaria, Poland, Ireland and France have all nationalized private retirement accounts.
The US is seriously in debt. This should come as no surprise to anyone with an IQ above 64. A quick scan of the US Debt Clock will tell you that the US national debt now exceeds $14T. If you have not been living in a hole for the past few months you also know that we have now reached the debt ceiling approved by congress.
The US federal spending is now running about $3.5T, but we are only collecting about $2.1T in tax revenue. Hence the ANNUAL budget deficit of $1.4T. I highlight the word ‘annual’ because I think this has been understated. This number accrues year after year.
Right now the interest payments on US government debt amounts to about $11,000 per person. That means for a family of 4, US policymakers have obligated you for $44,000 per year in debt service. Keep in mind; this doesn’t even cover principle payments!
Imagine if you rang up $50,000 in credit card debt this year but only paid off $10,000. And next year you ring up another $50,000 in credit card debt and pay off $10,000. You aren’t making progress. Neither is the US government.
The only way the government can fill that annual $1.4T gap is by borrowing. Over the past several months during QE2, the Federal Reserve has been buying 70% of all US debt each month. 70%!!!
The Federal Reserve is now the largest buyer of US debt in the world. It is now also the largest holder of US debt far surpassing China and Japan. With QE2 ending this month, where will we get another big buyer for US debt?
Obviously the rest of the world has lost its appetite for US debt, or else the Federal Reserve wouldn’t have had to step in with $600B in purchases (plus $300B in MBS purchases). So where do you think this money is going to come from to keep the American political machine moving?
Maybe budget cuts….. Hahahaha, sorry I just couldn’t resist. Have you ever heard of a politician voting for a pay cut and reduction in his budget? Not likely.
The largest pool of untouched money left in the US is private retirement accounts like your IRA and 401k. As I see it the only way for the US government to fill its budget gap is to go after your retirement money.
How might that happen you ask? Simple, congress mandates that all retirement accounts hold a certain percentage of funds in US treasury debt. While this number is difficult to pinpoint, according to my research Americans hold about $4T in 401k’s and about $8T in IRA’s.
That is $12T in private retirement accounts ripe for the picking. If congress mandates that 10% of all retirement funds be held in US Treasury debt, this would equate to $1.2T, or nearly the amount of our annual deficit.
Rest assured that if (when is more likely) this law is passed, it will be under the guise of the protection of the retirement savings for honest, hardworking Americans. Congress will clearly need to step in to protect the future of the people. Right… I seriously doubt congress cares much about your asset protection planning.
Of course you are probably still thinking this would never happen in the gold ole US of A. Think again brothers and sisters.
It happened last week. While this is not making headlines anywhere in the world (go figure), US policymakers have opted to seize funds from the retirement accounts of public sector workers in order to keep the government running.
Yes ladies and gentlemen, it has already begun.
There is a way for you to protect your retirement savings assets. Take back control through a special type of IRA.
Most people have the retirement assets tied up with the big companies like Fidelity, Vanguard, T Rowe Price, or any number of big mutual fund companies. These companies love to offer you their basket of funds or even an age based portfolio. Of course this is how they make their money.
What most people don’t know is that you can hold your retirement funds in virtually any asset class; apartment buildings, rental houses, farmland, timberland, precious metals, private business, hard money loans, cattle, stamp collections, art collections, or virtually anything else you can think of.
There is a special type of IRA (or Roth IRA) that allows you to regain control of your retirement assets. With this special IRA, you can even take your funds offshore to get them out of the hands of US policymakers interested in getting their dirty paws on your hard earned retirement cash. By implementing this type of special IRA into your asset protection planning, you are also making your retirement funds virtually creditor proof.
If you are interested in learning more about this special IRA, click here. This link will take you to Terry Coxon’s site that will explain in further detail. Terry holds a BA from Stanford and an MA in economics from UCLA. He is a renowned speaker at investment conferences around the world and is an expert on tax planning and asset protection strategies. I personally recommend Terry and his firm.
I highly encourage you to do something now about your retirement funds. US policy makers have already seized public workers retirement funds. With the US debt escalating into the stratosphere and the Social Security Administration bankrupt, there is little option left for policymakers but to nationalize private retirement accounts.
Even if you chose not to work with Terry Coxon and his team, you need to take action now. With the recent moves by policymakers, the end of QE2 this month, and the Federal government reaching the debt ceiling, I would imagine that there could be rapid changes made by congress to shore up the budget.
If you find value in this newsletter, please share on Facebook and re-Tweet to your friends and family using the buttons at the bottom of the page.