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From Teeka Tiwari, editor, The Palm Beach Letter: The United States has a $19 trillion debt problem.
And it’s found a solution… your retirement savings.
There are $19.4 trillion held in private retirement accounts like 401(k)s, Roth IRAs, standard IRAs, and SEPs.
And the government wants that money.
Think it can’t happen?
It already is…
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In 2008, Argentina nationalized $30 billion in pension fund assets.
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In 2009, Ireland took 4 billion euros ($4.51 billion) from pensioners and gave it to the banks.
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In 2010, Ireland raided pension plan holders again for another 2.5 billion euros ($2.82 billion).
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In 2010, Hungary nationalized its pension fund assets.
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In 2010, France seized $36 billion in pension fund assets to pay off its welfare bills.
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In 2011, Ireland levied a 0.6% tax against all private pension funds for four years, following the financial crisis.
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In 2014, Russia confiscated $8 billion in pension funds to pay its bills.
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With the exception of Argentina, you’d never expect these countries to engage in outright state theft. But the sad reality is, if you live in America, there is a good chance the government will come for your retirement funds, too.
Now, when the government does come for your money, it won’t be a “hard grab” like the outright confiscation we’ve seen in Ireland, Hungary, France, Argentina, and Russia.
Retirement expert Ted Benna says it will be more of a “soft grab”—through taxes. Ted is the man who invented the 401(k). I’ve been speaking to him about the coming retirement crisis. The news is grim.
Based on our current fiscal path, Ted sees tax rates rising 50%–100% over the next several years. This is backed up by data from David M. Walker. Walker spent 11 years as the comptroller general for the United States. Some people have called him the “CPA of the USA.”
Walker says taxes have to double or the country will go bankrupt. By 2020, he believes 92 cents of every tax dollar will go to Social Security, Medicare, Medicaid, and interest on the national debt.
If Walker’s right, we could be just four years away from a series of punishing tax hikes.
Ted thinks one of the first places the government will tax is retirement savings.
It’s not an unthinkable idea.
Early last year, President Obama made a run at taxing the earnings on tax-advantaged college savings plans (529 plans). These were supposed to be tax-free, protected investments, but the president had no qualms about putting them in Federal crosshairs.
Ted thinks one of the next targets will be the $505 billion held in Roth IRAs.
A Roth IRA lets you take after-tax money and invest it for retirement. What’s great about a Roth IRA is that, as long as you don’t withdraw any money until you are 59½, you never have to pay any tax on withdrawals.
This hasn’t gone unnoticed by the super-rich…
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Max Levchin is chairman of the social review site Yelp. He shrewdly set up a Roth IRA to invest in startup Yelp shares. A recent Forbes article estimates he has $95 million in his Roth. At 59½, he’ll be able to draw every penny of it out, tax-free.
The government could start citing the Levchin story as an excuse to come after Roth IRA’s. Ted thinks it will be successful. His best guess is that the government could impose a tax on half of all the funds held in Roth IRAs.
If we assume a 15% tax rate, the government would clear a cool $37.8 billion in extra tax revenue. If tax rates double, that number will be pumped up to $75.6 billion.
Here’s the key investment takeaway: If you’re relying on tax-free Roth distributions or low-tax distributions from your 401(k) and standard IRAs, you could be in for a rude shock. The government has its own eyes on that money—right now.
You must act now to rescue your retirement from
the Wealth Stealers
Faceless government bureaucrats aren’t the only Wealth Stealers plundering your retirement savings… I also discussed with Ted Benna how Wall Street is silently draining $17 billion each year from your savings in hidden fees and surcharges…
A fatal flaw hidden in your 401(k) plan can cost you $329,031 in savings. Fortunately, I’ve learned how you can fix it before Wall Street cuts your nest egg in half.
Click here to gain free access to this info. It’s one of three retirement exposés PBRG has created in the lead-up to the most important event in our history: our first-ever Retirement Rescue Roundtable.
On Tuesday night, September 13, our group of leading retirement experts will share our best ideas to help you produce extra income monthly, weekly, and even daily… while also helping you shield your wealth from Wall Street… and showing you the best ways to keep your money off the IRS grid. Click here to sign up for this free, retirement-saving event.
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