Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

US Government To Decide How Much Is Enough For Your Retirement

Politics / Pensions & Retirement Apr 08, 2013 - 09:19 AM GMT

By: Jeff_Berwick

Politics

Welcome to the new US.  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 in the US.  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 US 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"...and of course in the communist administration's eyes, that's a real shame. The job of government is of course to "level the playing field" by stealing from and putting up obstacles for those with "too much."

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."

So, according to them, $205,000 per year is sufficient and people should not be allowed to have more than that in retirement savings.  But, remember, disbursements from an IRA are taxable, so that $205,000, 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 after theft... or tax as they call it.  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.  

But your average person who owns mostly 2% paying dividend stocks or 2% paying Treasuries is actually losing nearly 10% per year to monetary inflation.  The US central bank's current rate of money printing  - which does and will turn into price increases - is over 10%.  If they are losing 8% per year on that $3 million then it will only be ten years before that $3 million is actually only worth $1.3 million in real dollars.

That $205,000 per annum, at today's monetary inflation rate, also will only be equivalent to $90,000 in ten years time.  After all the taxes to be paid that person would be likely eating cat food just to survive.

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.

Next Confiscation

This, of course, is the warm up for big confiscation of retirement account money later on... a topic that has already been discussed openly in Congress. I can't understand why anyone would put their money in a retirement vehicle under government control. That's like putting your child in a cage full of lions for safekeeping.

A much better option would be a self-directed IRA like the one we offer here at TDV. Also, did you know that you can buy real estate with your IRA? A good option would be real estate in another nation-state since the US government would have a very hard time confiscating that. You could invest in an income-producing condo in beautiful Acapulco, for example...or you could buy investment property in our burgeoning liberty-minded community at Galt's Gulch, Chile.

You could also invest in precious metals in a self-directed IRA and get a significant amount of them into jurisdictions that are much less likely to collapse in the coming years (for more on doing that, see Getting Your Gold Out Of Dodge - free to TDV subscribers).  And it wouldn't hurt to take some of those savings and invest in a foreign passport in a place that doesn't view your assets as their own.

The central planners in the US and most Western governments have and will decide how much is "enough" for you to have and if you manage to still have significant assets after that, they'll continue to whittle them away via taxation and inflation.  It's all easily predictable as this is where things always go once things are socialized or collectivized.  

As Winston Churchill said, "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."

We don't suggest you wait much longer before removing yourself and your assets from a system set on ensuring the equal sharing of misery.

Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media.

© 2013 Copyright Jeff Berwick - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Jeff Berwick Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules