Converting an I.R.A. Into a Roth? How’s Your Crystal Ball?

You’ll be hearing a lot in the next six months about Roth Individual Retirement Accounts — but not as much as you should about a long-term threat that hangs over them.

Why would you want to [swap a regular for a Roth IRA]? Because you think you or your heirs could end up with more money over the long haul by investing in a Roth instead of a regular I.R.A.

It all seems pretty simple, until you consider this: The tax laws might change substantially, throwing all of your careful planning into utter disarray. We’re currently staring down years of federal budget deficits and decades of looming Medicare and Social Security obligations. If wealthy people convert their retirement funds to Roth I.R.A.’s in large numbers, won’t all of that newly tax-shielded money look tempting to government officials years from now?

There is no way to know, and admitting the futility of making a specific prediction is where you have to begin this analysis. After all, if you get serious about your money at 40 and live until you’re 90, that’s a half-century for which you need to plan.

HOW ROTHS MIGHT CHANGE At the most extreme end, the federal government might try to tax the earnings on a Roth after all, say through the capital gains tax, which is currently at 15 percent for long-term gains but could go up in the next few years. Or it might levy some sort of an excise tax on excessive balances, however those might be defined.

As I've said since last summer...

THEY ARE COMING FOR YOUR PRIVATE RETIREMENT ACCOUNTS.

That is a heap of money that they want.

They can either promise to give you as much as you had before the economic downturn (say 2007 amount) if you agree to cancel your IRA/401 and roll it over to your SS account.

Or they will take an advance on the taxes you will owe by claiming, “So many hard-working Americans are beginning to retire thinking they have more in their 401s than they actually do, because they forget they have to pay taxes on them. So, we're taking some of those taxes NOW so that you won't have to pay so much later.” This, of course, will be a lie. They'll take some taxes now, say 15% out of every 401. And then in a few years they'll pass legislation to increase the percent holdings. Because if you have a 401, you are one of those filthy rich bastards that has robbed from decent, hard-working Americans who didn't have all the advantages you've had. So, they'll take it up to about 30% on what's left. Then they'll add a 5% surcharge for the same reason.

Voila, they've just taken HALF of everything hard-working Americans have put into private retirement accounts.

Do you really think that can't/won't happen.

And if they manage to get a majority of that PRIVATE PROPERTY (earnings ARE private property), then there is the added TOTALITARIAN benefit that those people that are successfully ROBBED will have to beg the government to help them retire.

“THEY ARE COMING FOR YOUR PRIVATE RETIREMENT ACCOUNTS.”

http://www.thefreemanonline.org/book-reviews/book-review-the-coming-economic-earthquake-by-larry-burkett/

Noted Author Larry Burkett wrote about this likelihood years ago in this 1991 book.

Basically, the govt has no other place to go to acces assets other than the 401ks and IRAs.

Thanks for the link. I’ll look in to the book.

And don’t think for a moment that this wasn’t planned by the GS’s and JPMorgans in collusion with the Federal Reserve and politicians.

This was a planned fraud from the start.

Bernie Madoff could learn many lessons from these criminals.

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