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The U.S. Government Wants Your IRA Money (Here’s How You Can Protect It)

The U.S. Government Wants Your IRA Money

Sxenko

Don’t be fooled by Obama’s latest promise of “Opportunity for All.”  His plan to secure “a dignified retirement for all Americans” is little more than a thinly veiled plot to use the hard-earned dollars of middle-income Americans to finance the government deficit.

And if things continue in the direction they’re headed, your existing retirement savings could be next.

Enter myRA.

The myRA program, or My Retirement Account, was launched by way of executive order (hence the only way to get it passed without Congressional approval).  The program can’t be made mandatory without Congress passing the required legislation.

But don’t worry.  It’s coming.  Auto-enrollment is one of the features in a separate proposal that’s already being pushed forward by the Obama Administration.

What’s the natural next step once the program becomes mandatory?  Well, at that point the government will be only one step away from getting its hands on an estimated $5 trillion in private IRA’s.  And you can bet your bottom dollar they’ll be coming after them.

That’s why I strongly recommend getting your retirement accounts overseas while you still can.  There you can invest in non-traditional options, like real estate, that have tremendous potential for growth and are subject to much more favorable taxes than you could expect to pay in the U.S.

Here’s What the Obama Administration Is Saying About MyRA

Basically, this program is designed as a starter retirement savings program for those in low- and middle-income households (those earning less than $191,000 per year). It’s also geared towards workers whose employers don’t offer savings plans or workers (such as part-time employees) who don’t qualify for the plans that do exist.

With only a $25 required initial investment and allowable contributions as low as $5, it’s a way to encourage those who currently aren’t saving for retirement (or can’t afford traditional options) to begin doing so.  And with principal protection, backed by the U.S. government, the account can never go down in value.

The account will function like a Roth IRA, since contributions are made with after-tax dollars.  As a result, post-retirement withdrawals are tax-free.  There’s also no penalty on withdrawals made prior to retirement, other than the minimal taxes owed on any investment gains.

Funds in the account will earn the same variable rate of interest as the Government Securities Investment Fund (GSIF or “G” Fund) available to federal employees in their Thrift Savings Plan, which has earned an average annual return of 2.24% over the past 3 years (barely outpacing inflation).

Workers can keep the account until it reaches $15,000 or 30 years (whichever comes first), at which point it must be rolled into a private Roth IRA.  They can also take the account with them when they change jobs.

Here’s What They Aren’t Saying

There are a number of problems with this proposed plan.  Take for example the fact that the plan makes no provision for any financial education or investment planning to help these individuals understand their long-term needs.

Many who opt to enroll will mistakenly assume they are saving enough for retirement, when in fact their minimum contributions and low-return investments won’t even remotely suffice.  Easy access to the principal also make the accounts entirely too easy to raid when something unexpected comes up.

However, these and other obvious flaws with the program are the least of my concerns.

What’s much more alarming about MyRA is that it’s just another way that the government is continuing to infiltrate the privacy and freedoms of U.S. citizens.

Government-backed retirement accounts will make your savings much more visible to the government.  As a result, your retirement money will become the target of a myriad of future special taxes.

And let’s be clear on what’s really driving this initiative.  

Currently, the U.S. government is roughly $17.5 trillion in debt.  It’s what happens when the only way you’ve found to narrowly avoid bankruptcy is to print more money.

To an entity that’s sitting that far in the hole, the estimated $5 trillion in private retirement accounts looks awfully enticing.  They need that money. YOUR money.  And MyRA is a natural first step for getting their hands on it.  

Why sell bonds in the public market when they can raise funds and finance the government with your savings?  And I shudder to even think what kind of implications such a shift would have on the private investment sector.

The U.S. Government Wants Your IRA Money

Rachel

Make Sure You’re the Only One Profiting from Your Hard-Earned Retirement Dollars

Can you imagine loaning your entire life savings to your broke cousin Johnny, whose inability to balance a budget over the course of many decades had left him snowed under in debt and owing money to every single member of your family tree?

No, that’d be absurd.  But on the flip side, why should you relinquish your decision-making ability with your own retirement savings and have them forced into treasury bonds to shore up a reckless U.S. government with no better track record?

Make no mistake.  The U.S. government is running out of options for funding its ever-increasing debt.  And your retirement savings are an easy target.  I’m not saying Uncle Sam is going to come knocking tomorrow, but the implementation of this program (and the pending bill that could make it mandatory) should be all the proof you need that it’s a very real possibility.

Explore Your Options

It’s time to give serious thought to moving your retirement savings overseas while you still have that option.  MyRA isn’t the only argument in favor of such a move.  But it is one of the most compelling.

Though you may think you have no choice but to leave your accounts in the hands of traditional IRA custodians, that’s actually far from the truth.  Options like Self-Directed IRAs put YOU, not a corporate-run financial institution (and certainly not the U.S. government) in charge of deciding where your money is invested.

There are tons of, perfectly legal, options.  One of my favorites is real estate, particularly raw land in emerging international markets.  I’ve seen first-hand what an incredible investment this can be, and its more long-term nature makes it the perfect vehicle for investing with your retirement dollars.

You can learn more by reading our free ebook Pay Dirt.  It explains our blueprint for land investments in much greater detail.

The stats don’t lie.  America’s debt is growing at unsustainable levels, and the government shows no signs of reigning it in. Don’t miss the obvious signs that the private retirement accounts of financially responsible citizens like yourself seem to be the best, if not only, solution they’ve got.

The logical response is to take control of your IRA funds yourself and diversify at least some (if not all) of them into jurisdictions that are behaving more responsibly. Hopefully, when Uncle Sam does get to your account, it’ll be one investment too late.

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