How the US Government Will Seize Your Retirement Account

EPJ ^ | 5-12-2011 | Simon Black

[Lonesome in Massachussets]

Back in 1993, Clinton’s Secretary of HHS, Donna Shalala, wanted to retroactively tax 401(k)’s to “capture” all the tax money lost to Federal Government. Clinton, not wanting to be a dead cert, slam dunk one term president told her to STFU.

[Lonesome in Massachussets]

That’s the first I’ve heard of that issue and wonder if we have other FReeper’s that can confirm or refute this.

Any legal precedent (not based on Constitutional issues) would immediately be superseded by new legislation. When the Rats are hungry enough they will gnaw on whatever meat is available.

[sanjuanbob]

Excellent idea. That’s the way the other side plays. Beat them at their own game....plus it’s a damned good law!

[dragnet2]

These guys will not stop until they take everything you have.

Unfortunately, tens of millions of hard working Americans will be financially gang raped by the government.

[OB1kNOb]

Any legal precedent (not based on Constitutional issues) would immediately be superseded by new legislation. When the Rats are hungry enough they will gnaw on whatever meat is available.

So, we'd better hope that there's not any RINO's in the House that like the taste of meat, so to speak, should it come to that.

[Apple Pan Dowdy]

"Time to convert dollars to fungible gold and silver."

So what do retirees do? They have spent a lifetime saving and building a portfolio for retirement. They count on those investments paying a small "dividend" to them each month and that is what they will live on during retirement.

So if they turn the whole or most of the portfolio into gold and silver, there will be no "dividend" each month. So what will they live off of? Trading the gold/silver for food, rent/mortgage, taxes will deplete the funds long before they are old enough to die.

I can tell you stories about the things we gave up all our lives while we watched our friends and neighbors all having them (fancy cars, bigger house, luxury boats, expensive vacations and clothes, and on and on) .... so that we could build a nice size retirement portfolio to live off of modestly in retirement and not be a burden on welfare or our kids. Now we face the government just taking it all. What kind of incentive to work hard and save will this leave the next generations?

[Lou L]

Right now, there is a window of opportunity to take action; US taxpayers with retirement accounts can set up a special kind of IRA structure that allows you to take control of your retirement savings, and even ship it offshore if you want to, completely legitimately.

An "IRA" is designated by U.S. Tax Code, and certain reporting requirements must be made--which is why some investors can actually deduct their annual IRA contributions.

So I don't buy this story one bit--your IRA can invest in most of these things today, even "off-shore" investments. It's just when you diversify, or go to cash out these investments, you can be pretty sure that Uncle Same will want his share of the results.

[Trailerpark Badass]

OK, anyone know how to do what the article dcescribes, without buying the guy’s book?

[Eska]

Never said it was worthless, bought coins when it was under 400 in early 90's. Something to be said about govt trying to jail people with gold down the road. We have gold in all our streams, pretty common to get an oz a day with small dredge when lucky. The govt has really cracked down on all the local miners in all kinds of ways; they don't want them gold huntin, bottom line. Regulations out the butt, new tax, permits, controls, govt keeping track of everything they do. Park service chasing them out, closing them down. on and on; WHY?

I guess if all the park service guys all came up missing and our fed govt ceased to exist, complete anarchy; gold would be the read deal; but until then (and I really do believe that scenario is a long ways off) the feds are going to really control Gold. Nice to have a bunch of, deal with friends under the table, but it really doesn't do the long term deal the stock market does for pensions.

I guess what I'm saying is if the govt ever gets serious about stopping everybody from possessing gold, it will be pretty much worthless until the govt collapses.

Maybe I'll be spending my summers out with a dredge in a couple years, but so far easier ways to make a living for us.

[Captain Peter Blood]

You want even get the 30 year Long Bond rate.
They will seize all the private pension funds, the last great reservoir of wealth left, and will give you “Worthless” Special Government Bonds that will pay about 2%, maybe 3% return and that's it.
After a period of time when the government has spent that wealth then we are truly done, there is nothing left to seize except all the real wealth of those left.
Also those bonds will never pay off.

[GOPJ]

Might be better to buy a farm in some foreign country...

[MeganC]

>>>So what do retirees do? They have spent a lifetime saving and building a portfolio for retirement. They count on those investments paying a small “dividend” to them each month and that is what they will live on during retirement.<<<

Not to sound unfeeling, but it’s the generation of retirees who utterly refused to address the problems that led up to this who are most at fault for their own problems. They thought they could borrow their way into prosperity when all they were doing was spending *MY* retirement savings in advance. Now the old ba$tards in the Senate will try to raid my savings accounts to please the AARP.

I’m sorry but I’m too busy worrying about the fact that there won’t be any Social Security for myself and now I’m looking at the fact that any 401(k) or etc. I might have saved up for will just be seized by the government. I’m worried about my retirement and forgive me if I don’t give a damn about the people who mortgaged my nation’s future to China so’s they could have nice vacations, big houses, and so they could buy cheap crap at Wal Mart.

They spent fifty years not giving a damn about people like me coming along behind them and I, for one, have no qualms about returning the favor.

[Vaduz]

US Government Will Seize Your Retirement Account.
Number one reason to keep any extra cash in a safe place (can in basement) if it’s not recorded it can’t be taxed.

[bbernard]

“An “IRA” is designated by U.S. Tax Code, and certain reporting requirements must be made—which is why some investors can actually deduct their annual IRA contributions.

So I don’t buy this story one bit”

Lou, I don’t know what this author is selling in this article but you need to get your head out of the sand. Congress writes the laws that you reference, they certainly can re-write them.

There have been some serious reporting on this recently from sites like the American Spectator, etc. Research GRA’s (Guarateed Retirement Accounts in the U.S.)

As late as last fall the US Senate held committee meetings with Economics and Financial Professors about GRA’s. Mark Levin actually interviewed one of the Professors. I could not believe that they are seriously pushing and discussing the confiscation of private IRA’s and 401K’s.

The real reason congress is looking into this is the Union Lobbyists are pushing for congress to enact laws that create GRA’s. If you think the Government pensions are in trouble you need to look at the Union pensions. The Unions want to hand over their pension responsibilities over to the Government GRA’s and let the collective (everyone else) pay for their over promises.

Research it. It is happening behind the scenes.

[BrewingFrog]

To the best of my knowledge, there are tax consequences against early withdrawls for tax-exempt retirement accounts. After retirement age, you may do with them as you please.

The idea that a rapacious Government can swoop in and tax the retirement savings of millions of hardworking people, who have planned and scrimped to keep their retirement hopes alive, is appalling. To the ‘rats, it’s just another pile of untaxed (or unseized) money.

This entire idea must be stopped.

[bbernard]

Here are just a few sources:

http://www.humanevents.com/article.php?id=39336
http://www.epi.org/publications/entry/webfeatures_testimony_waymeans_20080626/
http://washingtonexaminer.com/op-eds/2010/10/mark-hemingway-unions-target-your-private-retirement-savings

Here is one of the Professor arguments for GRA’s:
http://www.scribd.com/doc/7796877/GRA-Brief-Economic-Policy-Institute

Here is MediaMatters giving the spin/lies (These are not the droids your looking for.)...
http://mediamatters.org/research/201011020040

[CodeToad]

Probably could talk to the Bush fmaily about that.

[Lou L]

Research it. It is happening behind the scenes.

Oh, I don't disagree that the government will eventually try to do this. I suppose I should clarify by saying that this author seems to be using small nuggets of a truthful premise--I just disagree that there's much the average person can do about it.

You can invest in gold today within an IRA. You can also put your money in foreign investments. As long as you're invested in an "IRA" however, I don't see how you'll be able to shelter any potential earnings.

If someone is truly fearful they'll lose everything they have to these raving Socialists, they should take every trackable investment today and cash out, paying whatever taxes and penalties that will also come. Then, they should invest in gold, or look into tax shelters outside the United States. Even that's becoming harder to do, as the IRS and other agencies are getting their hands on once-confidential accounts, most likely in the name of preventing terrorism and other national security claims.

[bbernard]

I believe you are correct. There will be nothing the average person can do about it. Unfortunately.

[Charles Martel]

I have a neighbor, buying 2 new trks, snowmachines, everything he feels he will need (major purchases) for the rest of his life. Believes the govt will come after gold & silver like in the 1930s and it will be about worthless when they do, until our country no longer exists. He figures it's a better move to put his money in items that are going to go way up in price with inflation while there still is some value in his money. He might be right too.

I know several people who own and run RV service garages and storage lots. With the cost of fuel and the generally battered economy, you'd think those places would be struggling to keep their doors open. Quite the contrary, they've had to hire additional mechanics.

While the RV dealers with new machines are failing, these repair & refurbish shops are doing a lot of business. People are buying old motor coaches cheap, then rebuilding them. Drivetrain first, then they fix up the inside. That's definitely a sign of people putting retirement cash into something that will retain value and usefulness.