Buyer Beware: Do You Really Think Your Retirement Money Will Be There When You Need It?

The crash that shook the world in 2008 and wiped away some 40% of America’s wealth hasn’t stopped people from blindly investing their hard-earned money into new and improved Wall Street devised money-making schemes. Last year the total of U.S. retirement assets hit a record $ 20.8 Trillion and included investment vehicles like individual retirement accounts, government pension plans, and private-sector defined benefit plans.

A significant portion of that money has been invested into stock markets, much of it in the form of 401k retirement plans to which America’s workers send cash blindly on a monthly basis. What’s mind boggling about this is that the overwhelming majority of people who have a 401k account have absolutely no idea how much they are paying in exchange for the privilege of having their money “invested” for them by their financial manager.

In the following micro-documentary Future Money Trends investigates America’s 401k scheme, and how investors are being scammed from every angle and set up for total failure by their government.

Do you really think your retirement money will be there when you need it?


(Watch at Youtube)

During the 1920′s boom just 3% of Americans owned stock…

After the law for 401k’s went into effect on January 1st, 1980 the participation from the American public soared… and so did the fees Wall Street collected…

By 2006, it peeked at 64%… Wall Street had truly found the perfect cash cow who was willing to buy blindly every single month without question.

Talk to anyone who has a 401K and they won’t be able to tell you the fees, the investments they are in, or how much they can expect to have when they are in their 60′s.

At best they will be able to recall that they checked the box ‘High Risk, High Return’ or ‘Conservative,’ you know, like holding Treasury Bonds… which is literally lending money to the most bankrupt institution on planet earth.

Buyer Beware.

In essence, as an investor you are “lending” your money to these institutions (including Wall Street and the U.S. government) via your 401k, but you have no idea of the terms of the lending agreement.

First, Wall Street collects their “fair share” of fees amounting to some $ 77 billion annually, essentially shaving that much money right off the top of your investments and stuffing it into their own pockets. They are wolves, with no other goal then to put as much money in their pockets as possible before the bottom falls out. The success of your investment is the furthest thing from their minds.

Second, and perhaps even more alarming, is that the government has started to move into the private retirement market, just like they did with health care. They’ve already begun pitching Americans on why they can manage your investment better than the private sector via MyIRA accounts, but they won’t stop there. With so much money in play, our bankrupt government will have no choice but to utilize the trillions of dollars held in these retirement accounts to fund their outrageous spending. What that means is that, in the future, you can fully expect your funds to be seized and redistributed to those ‘less fortunate.’

And if outright re-appropriation isn’t politically expedient, then they’ll simply tax your retirement gains so heavily that you’ll be left with nothing but lint in your pocket.

Share the wealth, remember?

We’re not suggesting you shouldn’t invest your money into healthy dividend earning companies, but insofar as 401k’s are concerned the investments are structured to take as much money out of your pocket as possible.

Buyer beware, because we’re talking about your long-term retirement – the money you’ll depend on to be there when you need it most.

401k-trap

Free Report: The Best Alternative to a 401K


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

TICK TOCK: The Countdown To Government Confiscation Of Your Retirement Savings Has Begun

Writing at Zero Hedge, Nick Giambruno of Casey Research sounds the alarm on President Obama’s new “MyRA” program.

Simply put, the new myRA program put forward by Obama is at best a sucker’s deal… or worse, it’s a first step toward the nationalization of private retirement savings… Even before the new myRA program was announced, there had been whispers about the need for the US government to assume some risk for US retirement accounts. That’s code for forced conversion of private retirement assets into government bonds.

…With foreigners not buying as many Treasuries and the Fed tapering, the US government has been searching for new buyers of its unwanted debt. And this is where the new myRA program comes in.

In short, it’s ostensibly a new way for people to save for retirement. Of course, you can only invest in government-approved investments—like Treasuries—which probably won’t even come close to keeping up with the real rate of inflation. It’s like Jim Grant says: “return-free risk.”

In reality, a myRA doesn’t really provide any significant new benefits over existing options. To me it just looks like a way for the US government to pass the hot potato on to unsuspecting Americans in exchange for their retirement savings.

The net effect is the funneling of more capital to Treasury securities and thus helping the US government finance itself.

I believe myRA is a way to nudge the American people into gradually becoming more accustomed to government involvement in their private retirement savings.

It’s incorrect to assume nationalization couldn’t happen in the US or your home country. History shows us that it’s standard operating procedure for a government in dire financial straits… In just the past six years, it’s happened in some form in Argentina, Poland, Portugal, Hungary, and numerous other countries.

To me it’s self-evident that most Western governments (including the US) have current debt loads and future spending commitments that all but guarantee that eventually—and likely someday soon—they will try to unscrupulously grab as much wealth as they can.

To put this news in context, consider that in late 2008 Democrats openly discussed the possibility of confiscating private retirement accounts in order to “strengthen and protect Americans’ 401(k)s, pensions, and other… plans”.

The [Congressional] testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.

…The current retirement system, Ghilarducci said, “exacerbates income and wealth inequalities” because tax breaks for voluntary retirement accounts are “skewed to the wealthy because it is easier for them to save, and because they receive bigger tax breaks when they do.”

…GRAs would guarantee a fixed 3 percent annual rate of return, although later in her article Ghilarducci explained that participants would not “earn a 3% real return in perpetuity.” In place of tax breaks workers now receive for contributions and thus a lower tax rate, workers would receive $ 600 annually from the government, inflation-adjusted. For low-income workers whose annual contributions are less than $ 600, the government would deposit whatever amount it would take to equal the minimum $ 600 for all participants.

In a radio interview with Kirby Wilbur in Seattle on Oct. 27, 2008, Ghilarducci explained that her proposal doesn’t eliminate the tax breaks, rather, “I’m just rearranging the tax breaks that are available now for 401(k)s and spreading — spreading the wealth.”

Now that the Democrats have nearly decimated the economy (Stimulus II, anyone?), the trillions of dollars in private retirement accounts represent the juiciest of all possible targets.

So why so concerned about the Democrats taking over your 401(k) plan, Sparky? What could possibly go wrong?

Hat tip: Mark Levin

Doug Ross @ Journal

VAPORIZED: Detroit Obliterates Retirement Funds: 80% Cuts to Pensioners: “This Is Going to Affect Everyone”

detroit-bankrupt

Though a decade ago civil servants and union members would never have believed it could happen, the stark reality of the situation came to pass this morning.

We now know the answer to the question: What happens when a government makes promises it can’t keep and borrows so much money it can never be repaid?

This morning a judge overseeing the City of Detroit’s fiscal sustainability ruled that the City can be afforded bankruptcy protection, meaning that all 100,000 of its creditors now stand to lose a significant portion of monies owed to them.

The most notable victims are the tens of thousands of retirees living off of pensions – many of whom will see an 80% obliteration of the retirement funds they believed they’d receive until they died.

Creditor attorneys have repeatedly speculated they expect Orr’s plan of adjustment to mirror the June 14 proposal he offered creditors to avoid bankruptcy. That deal proposed giving unsecured creditors such as pensioners and bondholders a $ 2 billion note for $ 11.5 billion in estimated debts — or less than 18 cents for every dollar owed.

Most of those affected assumed the government would simply find a way to borrow more money or fabricate it out of thin air. They were wrong and now they are paying the price:

“Oh my, oh my. Everyone is worried. When we think about what could happen, it’s scary,” said Larsen, 85, who moved to Palm Harbor, Fla., outside of Tampa after he retired in 1976.

“If they take our health insurance? Oh god. Cutting pensions? It’s terrible. The city of Detroit was our pride. Honest to goodness. We loved it.”

“We are all worried,” said Nancy Schmidt, the group’s secretary. “This is going to affect everyone in different ways. If it comes to fruition, I’ve got two empty bedrooms and I may end up having to rent them out.”

“My net pension is $ 2,300 a month,” said Kammer, 77, who moved to Englewood, Fla., not long after retiring with a disability in 1977.

“I could make it for a while, go through savings, but pretty soon, I’d end up in bankruptcy.”

“(Retirees) feel like something that they’ve earned and were promised is being taken away from when they’re not in a position in their lives to plan for it and fight back,” Plecha said. “They’re at a time in their lives when they’re most vulnerable.”

Detroit is the first and they have now set a precedent for other cities in similar situations. You can be assured that more will follow.

First it will be the cities. Then the states will go under. And finally, the Grand-Poobah – our own Federal government. Detroit’s debts are pocket change compared to the $ 200 trillion in future liabilities owed by the United States of America.

If you are depending on a government retirement package to be there for you for the rest of your life, you’d better think again. Over twenty thousand Detroit retirees thought the same thing – and as of today they have been wiped out.

When this crisis hits the Federal Government – and it will – you’d better be ready for them to take drastic measures. This means they’ll be forced to not only cut retirement benefits promised to federal employees, but will make the case that if they have to give up their retirement funds, you’ll have to give up your 401k, IRA or personal savings.

Sounds impossible, right? Congressional members have already gotten the ball rolling on a nationalization of America’s retirement funds, and when they are ready to do it they’ll pass the legislation just like they did when they seized 1/6th of our economy by nationalizing health care.

They are coming for the money – YOUR money – because they will be left with no other choice.

If you’re not planning on a secondary income stream or preserving wealth in the form of gold and silver, productive land, or other tangible assets, you’ll end up just like the retirees from Detroit. Having additional resources, like a well stocked long-term pantry and a preparedness plan for financial disaster, can mean the difference between living in poverty or thriving when best laid plans fall apart.

Plan for the worst, because that’s what’s coming.


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

FINALLY: President Obama to decide how much money you need for your retirement

Crackpot Preppers

Mark Levin’s been warning about this for years, ever since a Marxist crackpot was asked to testify about nationalizing retirement accounts in front of a Congressional committee.

You can think of that as showing some ankle. Now the president has hiked up the entire skirt.

Welcome to the new U.S. Socialism always has the same predictable process. Once the government collectivizes a sector then the politicos and bureaucrats get to work on “improving the system”. In a private enterprise, that’d mean offering more to your customers for a cheaper price. In government, it is always the opposite, finding ways to reduce benefits for their “customers”.

This is why Obamacare is and will be a disaster to anyone interested in having quality medical care and choice… Once the government uses its force to gain a monopoly on a sector like medical care then all of a sudden it now becomes everyone else’s business what you do with your own body. You smoke? You should be stopped! Don’t wear a seatbelt? You should be fined. Why? Because we are all paying for each other’s medical care and so it now becomes everyone else’s business what you do with your health because it could potentially cost them more money.

The same has been happening since the U.S. government has had a multi-decade long monopoly on retirement savings (IRAs). Since they get to make the rules they get to decide just how much is enough for your retirement and that is exactly what will be happening next week when President Obama will be releasing his budget plan which will limit how much a wealthy individual can keep in those tax-reducing IRA plans and other retirement accounts.

According to a senior administration official, wealthy taxpayers can currently “accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving”… What is the “reasonable amount” that he thinks is enough? The numbers being bandied about seem to indicate $ 3 million. Sounds like quite a bit, right? Well, let’s look further at the proposal.

“The budget would limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $ 205,000 per year in retirement, or about $ 3 million in 2013.”

[But] if you lived in any number of states where total income taxes are over 50%, very quickly brings that number down to around $ 100,000… Of course, that is just the beginning of other payments to the state. Your average person with a $ 3 million IRA probably lives in at least a $ 1 million house. If that person lived in New Jersey where property tax averages 1.89% of property value, then you can take another $ 19,000 off of the remaining $ 100,000 for property tax payments to rent his own home.

Of course, there will be numerous – countless really – other taxes paid over the course of the year… gasoline tax, cigarette taxes, alcohol taxes and numerous others. But, even without including those we are already below $ 7,000/month.

But here is the real kicker. If that person did take the $ 205,000/year annuity, their retirement funds would only last them fourteen years. Of course, some may state that they could and should be earning a return during that time which will extend it.

…These are the wonders of the American Dream today. It is turning into a nightmare. They have you coming and going from all sides. And then, if you manage to survive all the taxes and inflation, whatever remaining money you have left will be mostly gutted by the death tax. Yes, there is a tax to die in the land of the free. And don’t try to commit suicide either. That’s illegal.

And, like the Alternative Minimum Tax, which was originally designed to target only “the rich” but trapped everyone, rest assured that all Americans are in the cross-hairs. To deploy another cheesy metaphor, Obama’s effort to cap retirement accounts at $ 3 million is the camel’s nose under the tent.

This Marxist class warfare, which is provably destructive of the civil society and free enterprise, must be stopped. And if that means crushing the RINO establishment along the way, so be it.

Doug Ross @ Journal

Larwyn’s Linx: Obama Budget to Cap Retirement Accounts at $3 Million

Crackpot Preppers

Send us tips! Bloggers: install a Larwyn’s Linx widget. Get real-time news, 24/7, at BadBlue.

Nation

Obama Budget to Cap Retirement Accounts at $ 3 Million: Breitbart
Bloody Calculus: Owens
Family Breakdown Is At The Root Of Black America’s Ills: Elder

Boehner Wimps Out, Chapter 9,036: GOA
Mass Shootings Share One Common Thing and Its Not Guns: AmmoLand
Psychiatric Meds: Prescription for Murder?: NewAm

GOP Congressman Vows to Kill Any Senate Gun Bill With A “Blue Slip”: RWN
Man Arrested for Connection with Colo. Corrections Director Death: LawOfficer
Reid Hints at Using ‘Nuclear Option’ on Judges: Roll Call

Economy

Economist Cited by WH Blames Obamacare for Jobs Numbers: Flopping Aces
A Tipping Point In The Financial System: GoldSeek
An Astounding Statistic: $ 32 Billion In Overdraft Fees: Denninger

To the Left, California is Now the Model for America: Greenhut
Understand where we’re headed: SHTFplan
Disability Ranks Continue to Surge Under Obama: IBD

New Generation Of Subprime Auto Loans Could Cause Another Catastrophe: TAC
Cancer Clinics Already Turning Away Thousands of Medicare Patients: RWN
The Economy’s Bad Because of the Sequester or Something: Ace

Scandal Central

Missouri Government caught sending Private Data on Gun Owners to DHS: OffGrid
Campus Cops Were Warned About Aurora Movie Theater Shooter James Holmes, But No One Followed Up: Ace
Bloomberg’s Mayors Against Illegal Guns Drops Member After Weapons Accusation: AmmoLand

Climate & Energy

Obama’s EPA: Cloak and Banner: HuffPo (Stier)

Media

Rush Limbaugh: It’s official, we have a dying country: Scoop
Liberals ‘are so outraged right now that they could absolutely lynch this uppity, gay-hating Uncle Tom’: Wisdom
Did SiteMeter Commit Suicide?: RSM

Slippery Slope Alert: Columbia Prof Equates His Incest With Daughter to Homosexual Sex: Clash
Forbes ‘Manchurian Candidate’ Article on Obama Disappears Down the Memory Hole: GWP
We Can No Longer Tolerate Two Americas: Pagun

MSNBC, Kindergarten for Bored, Angry Unemployed People: Ace
Why Shouldn’t Columnists Be Required to Carry Insurance?: Pagun
CNN’s Jake Tapper Smacks Obama and Bloomberg For Being Clueless About Guns They Want To Ban: RWN

World

Saber Rattling For Fun And Profit: Preemptive Offenses
Obama and the Democrats learn the value of the military toolbox: AEI
FDR’s Antisemitism Doomed Thousands of Jews To Suffer The Holocaust: A Lesson For Today’s Jewish Leaders: Lid

Sci-Tech (courtesy BadBlue.com/Tech)

Why Facebook Home bothers me: It destroys any notion of privacy: Malik
Google publishes – then removes – a post stating that Fiber will launch in Austin, Texas next: NextWeb
KFC ‘Invents’ Boneless Chicken, Thinks it Has ‘Game Changer’: OTB

Cornucopia

Do You Get It?: MOTUS
Revealing images of patients who have undergone extreme plastic surgery: DailyMail
Diane DeGette World Problems: Sharp as a Marble

Image: Doug Anderson Won The College Dunk Contest With A 360-Degree, Between-The-Legs Jam
Today’s Larwyn’s Linx sponsored by: Please Support Trevor Loudon’s Book Tour

QOTD: “Today’s jobs report reveals that 90 million Americans are now outside the labor force. We need to be getting Americans back to work, helping people move off of food stamps and welfare, and find good jobs with steady incomes. But the comprehensive immigration bill being drafted right now would provide nearly immediate work authorization to millions of illegal immigrants while substantially increasing the future flow of workers. Our first priority must be to help American citizens, and current legal immigrants, find good employment. What we cannot have, and what is not sustainable, is an economic system where a large and growing share of our population is permanently unemployed while jobs are filled by a constant supply of foreign workers.” —Sen. Jeff Sessions

Doug Ross @ Journal