They Want Your IRA (White House pushes investors toward government accounts)

WSJ ^

[Red in Blue PA]

President Obama’s regulators aren’t slowing down, alas. And on Wednesday they unveiled another part of their plan to push Americans out of private investment accounts and into government-run plans.

[berdie]

later

[Read Write Repeat]

Gotta love it when government tries to “fix” a problem they created.

[tbw2]

How can we read the full article without signing in or paying?

[Pagey]

Bttt

[taildragger]

The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts.

Compliance up the Ying-Yang. Small firms out, Crony-Capitalist win. Fee-Only niche is already a fiduciary, the go on doing the right thing.

The only saving grace, although it maybe a "cold" option is "Robo-Advisers". Millennials will be ok with it, but will others glom onto Robo-Advisers?

I think the big question is will large employers now require you get advice either their internal option ( usually a .45% fee), or prove you are using an outside adviser? Your Employer may not want the liability. Will "Wrap fees @ 1% or 1.5%" annually now be in vogue, and that in my book is not cheap.

The funny thing is an ole Financial Planner said to me in the go go 2000's, "you know I am licensed and if a client feels I sold them a bad mutual fund, I get sued, yet they can go on Ameritrade and do their own trading and screw themselves up and get away with it"

"Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence. Labor’s new rule will start biting in January as the President is leaving office.

This SOB is doing everything he can to destroy Reagan's legacy which includes Kemp-Roth that gave us the 401k, and later in the Clinton years the Roth IRA.

Yes Gov't run clone programs, just like SSI was a govt clone of the Insurance covert to annuity option. Everything they touch is not as good as the private sector.

BTW does anyone know who is an Economic Adviser to Hillary? Teresa Ghilarducci.... If you know about her, and what she feels about the 401k's etc. isn't it a co-wink-a-dink that this is happening now?

[hadaclueonce]

They will ensure the GOP-e gets their share and they will be all for it.

The Fix is in.

[PROCON]

If I like my IRA, can I keep my IRA?

[bkopto]

Who in their right mind would want the feds as their counterparty in their retirement account?

I gave up contributing to a 401K a long time ago. Joined at the hip with the .gov criminals, with your retirement money?

No thanks. I’ll pay the taxes now.

[Old Yeller]

When is the Tree of Liberty going to get watered? That thing can’t last much longer.

[Gamecock]

That’s because retirement plans are so racist.

[The Great RJ]

Just like Social Security trust funds being stolen by the government and replaced with IOUs. Soon the government will decide how much of your savings you will get and how much will be redistributed to loafers, illegal aliens and anyone else deemed more worthy of your money than you.

[SueRae]

They’ve been pushing for this since they got into office. Look up Teresa Ghilarduci (sp). There will only be one box I’ll go for if they try and pull this $hit.

[normbal]

Old news. This has been discussed in congress both in open and closed-door hearings. It’s basically a done deal. Forget the name of the economist from Columbia that cooked the numbers on this, but she ... wait, here it is:
http://money.usnews.com/money/blogs/capital-commerce/2008/10/29/401k-foe-teresa-ghilarducci-the-most-dangerous-woman-in-america

It’s going to happen.

Then there’s this:

9/1 Patrick Heller - US Departments of Labor And Treasury Schedule Hearing On Confiscation Of Private Retirement Accounts

US Departments of Labor And Treasury Schedule Hearing On Confiscation Of Private Retirement Accounts

Liberty Coin Service
September 1, 2010
Commentary on Precious Metals Prepared for CoinUpdate.com
By Patrick A. Heller

On August 26, the US Department of Labor issued a news release (http://www.dol.gov/ebsa/newsroom/2010/3bsa082610.html). It lists the agenda for the joint hearings being held with the Department of Treasury September 14-15, 2010 on what is euphemistically called “lifetime income options for retirement plans.” The hearings are being conducted by the Labor Department’s Employee Benefits Security Administration.

I don’t like speaking in tabloid-style terms, but the unstated agenda of these hearings, as I understand it, is to push for the US government to eventually nationalize (confiscate) all assets in private Individual Retirement Accounts (IRAs) and 401K plans!

The US government is desperate to get its hands on private assets to help cover soaring budget deficits and debts, and this is simply the largest and easiest piggy bank that could be seized. The Investment Company Institute estimates that at the end of 2008 that there were $3.613 trillion of assets in IRAs and $2.350 trillion of assets in 401K plans.

For more than the past ten years, I warned readers that the US government was eventually going to go after private retirement accounts. I considered that as the most important reason to avoid establishing precious metals IRAs. Very few other writers (Ron Holland being one) have picked up on this issue as early as I did. In fact, the mainstream media pretty much ignored the subject even after a House Committee held hearings on the issue in October 2008.

Obviously, an outright seizure of assets would meet stiff resistance from the public. So the confiscation will never be described as such by government officials. Expect to see terms such as “retirement income protection” thrown around. It is highly likely that such a program would be implemented in steps to help overcome public opposition.

The US government plan is to eventually take ownership of all assets in IRAs and 401K accounts and replace them with US government “Treasury Retirement Bonds.” In the October 2008 hearings, it was proposed that these bonds pay a 3% interest rate. Another major change is that, upon retirement, the individual’s retirement account would be converted into an annuity. Once the individual is deceased, the individual’s heirs would not inherit anything (similar to what happens now with Social Security “accounts”).

Among the steps that could be taken to accomplish total confiscation are to first make the conversion voluntary, then make it mandatory for only a portion of total assets. The final step would be making it 100% mandatory for 100% of all assets. One idea proposed in the October 2008 House Committee hearings (after trillions of dollars had already been lost in most assets categories) to help push this plan onto the public, was to allow the seized assets to be replaced with government bonds at a face value of a previous higher valuation date. The idea was that a private citizen, who might have lost 20-50% of his retirement asset value, would be much more willing to accept an inferior retirement asset if doing so allowed them to recoup the losses.

Obviously, brokerage companies and mutual funds strongly object to the potential loss of fees they are now receiving for private retirement plan services. The Investment Company Institute, whose member companies manage more than $11 trillion of assets for about 90 million investors, reports that 96% of surveyed households object to the US government requiring that retirement assets only be distributed as annuities. Among the scheduled speakers at the upcoming hearings are representatives from the Investment Company Institute, Fidelity Investments, Putnam Investments, Lincoln Financial, and Vanguard.

These mid-September hearings have to be evaluated in conjunction with the introduction on August 5 of S. 3760, sponsored by Senators Jeff Bingaman (D-NM) and John Kerry (D-MA) to established mandatory automatic IRAs for many workers who are not covered by company retirement programs. If enacted, employers of such workers would be required to pay 3% of compensation into these accounts, which would have the effect of increasing the assets that the US government could then seize.

As recently as my July 27 CoinUpdate column, I have continued to warn readers to avoid establishing precious metals IRAs—specifically because of this risk of confiscation. I have also long advised that the companies pushing such accounts to customers were giving their customers bad advice.

But, if you already have a precious metals IRA, what can you do now to continue to hold gold and silver as insurance against the decline in the value of other assets? I’m sorry, but I don’t have any perfect solutions.

Any legislation is likely to take time before it becomes law. Therefore, while individuals need to begin to plan how to protect themselves, there is no need for immediate knee-jerk reactions.

Among the options to consider are distributing assets from the retirement accounts and paying the respective income taxes on them. In this way, you can maintain custody of most or all of the assets (depending on where you come up with the funds to pay the taxes). However, if you are under the age of 59-1/2, you may be subject to an extra 10% excise tax for taking a premature distribution. As ugly as this option is, which could accelerate tax payments, it is perhaps the best protection against having assets turned into US Treasury debt.

Another possibility is to sell off your precious metals in a retirement account and replace this holding with gold and silver outside of any retirement account. This would preserve your precious metals position, though it would leave other assets at risk of confiscation.

For some, it may make sense to see what kind of incentive (bribe) is offered for those who voluntarily convert their assets into US Treasury debt. Because gold and silver prices have been rising for the past decade, though, there may not be any such benefit available.

If I hear of other good ideas for protecting wealth from what I expect will ultimately be outright confiscation of IRAs and 401K assets, I will pass them along. In the meantime, give serious consideration as to whether it is worth making future contributions to private retirement accounts.

Keep in mind, contemplating confiscation of private retirement assets is a sign of extreme desperation by the US government. By implication, it is a loud warning that the future value of the US dollar is almost certain to be much lower than it is today. Owning gold and silver, outside of private retirement accounts, is now a much more important wealth-protection step than ever before.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (http://www.numismaster.com under “News & Articles). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.

Copyright 1999 - 2010 Le Metropole Cafe. All rights reserved.

[KarlInOhio]

I don't trust the Obama administration on this. On the other hand there are far too many crooks in the "financial advice" business who are looking for ways to separate you from your money. I've had people look me in the eye and tell me I should pull money out of my IRA and put it into the annuities they are selling to defer taxes. I wonder how many people they fooled.

Even without this rule, no one will get close to my retirement money without having a fiduciary responsibility to me. When bankers or insurance agents go past simple accounts or insurance policies they are opening up both your wallet and theirs, and its not to give you money.

[xenia]

“good. then it can be reversed in January.”

When have you ever seen that happen?

[ronnie raygun]

They want more of your money to squander like social security. They will give you what they feel you need not what you expect calculate or plan on and someone else who is not responsible did not save did not excel in his or her life will get the same amount as you. Can we say communism

[SkyPilot]

We are living in the era of the Ponzi Scheme.

A couple of months ago, I watched a two night TV series about Bernie Madoff. Richard Dryfess played Madoff and turned in a marvelous acting performance. The script was very real, and based on actual events.

Everyone knows now that Madoff pulled off the largest Ponzi scheme in history, but what is not acknowledged by everyone is that there are much, much larger Ponzi Schemes at work in our lives today.

What is a Ponzi Scheme?

In December 1919 a certain Mr. Charles Ponzi of New York initiated an "investment" scheme in which he put up $150 dollars and got ten friends to do the same. He promised his friends a 50% return on their "investment" in 90 days. He then got a second set of friends, many times larger than the first, to put up similar amounts and promised them the same "return on investment" that he had promised the original group of "investors." With the money he collected from the second set of "investors," he paid the first set back their $150 dollars plus the promised 50% "return" ($75 dollars). Naturally, the original investors were thrilled and enthusiastically began promoting the scheme. The process was quickly repeated with the second set of "investors" - and rapidly mushroomed from there. The intrigue was simplicity itself: give Ponzi money and in 90 days (and usually much sooner than that) he would give you your money back plus 50%, plus 10% to the recruiter. There was only one problem with the scheme: while the originators and early participants were handsomely paid off from the cash flow of those they recruited, the last ones who were brought into the scheme found that there was no one left to be recruited, and the cash flow stopped - leaving them "holding the bag." Before the scheme broke down, however (in May of 1920 - six months after it began), Ponzi had made more than a million dollars. Whether Ponzi knew it or not, what he had done was formulate or give expression - so to speak - to much of the thinking which lies behind today's New World Economic Order.

Our economy, in normal times of non-recession, grew at about a rate of 3.5%. Sometimes more, sometimes less. Today, the "growth" rate reported is a joke. The numbers are all cooked (read: lies). The Stock Market is completely out of synch with actual economic reality. Today's investors will require that future investors continue the scheme so that they can reap their profits.

It is an investment pyramid that feeds off of new money, including Central Bank hot air. There is no real price discovery in the markets anymore because of Central Bank and other manipulation.

Stated here (as to where did the money come from to cause the stock market to expand in value so much from 40 years ago:

http://www.apocalypsesoon.org/xfile-44.html

Essentially it's come from:

(1) Lowering the wages of average American workers and diverting the money thus saved into the market.

(2) Opening up sources of funds which used to be "off-limits" for investment into the stock market [i.e., pension and retirement funds, public funds, funds held in trust (both public and private), etc.] and pouring this money into the market.

and

(3) The creation of mutual funds and 401k accounts to expand the amount of people capable of participating in the market.

You add a (4): massive Quantitative Easing (read: Central Bank creation of money) that the market overdosed on like heroin.

[Sivad]

No worries. The Dem’rats will put it in a lockbox and
protect it just like they did with Social Security.

[CincyRichieRich]

I would say they are lying...growth? More likely is our economy is in shrinking mode for several quarters. Who owns the stats? Who can you trust.

[SgtHooper]

“I’ve had people look me in the eye and tell me I should pull money out of my IRA and put it into the annuities....”

Same here. I just will not do it. At this time, all I want is something to meet inflation.