It is only a matter of time
Uncle Sam Wants Your Retirement Money
The Sovereign Society (February 17, 2011)
The guys in Washington are getting desperate.
For years, our government has relied on the major Asian players like China and Japan to finance our debt. I’m sure you’ve heard this story. We bought their stuff, and they bought our Treasuries and other U.S. paper.
This system worked out great for us.
Today, that’s no longer the case. We’re the biggest financial losers on Earth…
Our national debt is a staggering $14 trillion! Worse, foreign investors don’t trust us to pay it down – so they’ve cut off our cash flow.
In short, the government needs Treasury buyers. So the guys in Washington are turning to you… and your cash-rich retirement plan to buy up those unwanted Treasuries.
Another Social Security?
The Department of Labor and U.S. Treasury Department are looking into ways to promote the conversion of retirement plans into an “annuity payment.”
But here’s what you need to know: An “annuity payment” is really government speak for forcing you (think: mandatory Social Security contributions) to buy U.S. Treasuries with your retirement money.
And most likely, the government wants to lock you into those low-yielding 30-year Treasuries that foreign investors no longer want. That way, they can finance a mountain of deficits for decades to come.
Imagine that 100% of your retirement is tied to the dollar, a declining asset and backed by a practically worthless government IOU. It’s the last asset you’d want to own for your retirement.
What’s more, the timing coincides with the beginning of the retirement of the Baby Boomers. Think about it, beginning next year the first wave of the 76 million Baby Boomers will begin turning 65 and there will be a ton of money flowing into treasuries each year for the foreseeable future.
Make no mistake about it, Uncle Sam wants your retirement plan – and there’s really only one thing you can do to protect yourself – get your retirement money offshore while you still can. They are coming for it and you are running out of time.
Uncle Sam Will Tell You When You Can Take Your Own Money
(And they won’t let you take it all at once)
A major step towards the forced purchase of treasuries will come through a fundamental change in the way you take the money out of your retirement plan.
Federal lawmakers want to remove all of the flexible withdrawal options you have. They want to force you to withdraw money in equal payments over your remaining life span, known in the industry as a lifetime annuity.
An annuity is a steady stream of income that will be paid to the retiree over the remainder of his life expectancy. A 67-year-old male would receive his payments over a 15-year period. Contrast this with the rules in place today that give you the ability to withdraw all the funds as a lump sum or as needed after reach age 59 ½. (The current rules require mandatory distributions begin by age 70 ½.)
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What is the Ultimate Game Plan?
I will guarantee that the government’s solution for funding an annuity is to have all of your retirement assets purchase treasuries with maturities matched to the payment stream. They have been looking for a way to force your retirement assets into treasuries and this is the first step.
My guess is rather than forcing everyone to buy treasuries today, they’ll force you to do it once you reach retirement age and your lifetime income stream starts. Once retirees become accustomed to the new lifetime income stream, it will be an easier transition for the government to eventually require retirees to invest in treasuries as the only allowable investment for retirement plans.
How to Protect Yourself (While You Still Can)
Option #1: Move Your Funds to a Non-U.S. Bank
You’ll get relief from the clutches of greedy bureaucrats, lawsuit-hungry lawyers and data-mining snoops.
Privately trade stocks, bonds, mutual funds, CDs, precious metals and currencies. Buy into elite mutual funds, managed by analysts who have consistently outperformed their American counterparts.
Option #2: Purchase a Non-U.S. Annuity
Prevent creditors from gaining unwarranted access to your funds. Participate in investments that are normally unavailable to U.S. citizens. Hold your assets in a safe offshore haven without violating IRS regulations.
Note: To buy an offshore annuity, you must work with an adviser who the insurance company approves.
Option #3: Form an International Business Company (IBC) or Foreign Corporation
This adds a significant layer of asset protection and privacy to your business (if established in the right jurisdiction).
You can also use it to open a foreign banking/trading account, purchase an annuity, make foreign investments directly or purchase real estate.
Physical possession of your funds rests with a non-U.S. company that may not recognize judgments awarded by U.S. courts.
Note: Your IRA would be the owner or member of the corporation depending upon the structure and YOU would be the manager with complete control over where the corporation does business. The custodian will, of course, insist on an annual statement of the corporation’s activities and assets it owns.
Option #4: Direct Foreign Investment
In some instances you are able to make a direct foreign investment thereby moving your assets offshore. A good example of this type of investment would be the purchase of real estate in a foreign country.
There are other direct foreign investments available to the holders of retirement plans. These types of options continue to dwindle as our government pressures them to become, in effect, extensions of the IRS.
Defend Yourself Now!
There really is no downside to moving your retirement plan offshore. After all, even offshore you can still invest in everything you own today.
If I’m right and the government does try to keep retirement plans in the U.S. and, as much as possible, invested in U.S. government securities, you would still be better off moving your account offshore.
The logistics involved in trying to force offshore illiquid assets to come back probably won’t justify the expense and time involved. The most likely course of action by the government will be some type of grandfather clause on existing accounts.
Your time is limited. Don’t take any chances – there’s no time like the present to liberate your retirement from the potential clutches of the U.S. government.
Best Regards,
Larry Grossman, CFP®, CIMA®
http://sovereign-investor.com/2011/02/17/uncle-sam-wants-your-retirement-money/
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