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Missed Fortune – The Drive To Nationalize Private Retirement Plans

Posted on | November 25, 2012

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Why the Federal Government is Eyeing Your Retirement Money

Folks who have been keeping an eye on their future understand how important it is to be capable of anticipating and removing the roadblocks that they’re likely to encounter. This means that factors like increased taxes, higher inflation, and continuing market uncertainty and volatility must be addressed in order to reach the bright future you’ve envisioned.

With a national debt of $16.2 trillion, political leaders are becoming increasingly creative as to where they can get their hands on enough revenue to continue their high-spending ways. Just recently the president began a push for a new national retirement system that could include the takeover of existing IRAs and 401(k)s as a source of potential funding.

Why would this even be a consideration? It’s because the $2.5 trillion in revenue taken in annually by the IRS, is only enough to pay the interest on the national debt and to fund entitlement payments on programs like Social Security and Medicare. That $2.5 trillion is 100% spent, which means the remaining $1.3 trillion required to fund the operation of the federal government will have to be borrowed.

One of the ways being considered to provide this funding is to have the government take over the public’s IRAs and 401(k)s and nationalize them by having the people buy treasuries, government-sponsored annuities and so forth. The bottom line is, the government is considering taking control of people’s retirement saving vehicles because it needs the money.

It’s a desperation move at best, since the federal government owes roughly $120 trillion in unfunded liabilities, meaning promised entitlement payments like Social Security and Medicare that must be paid out over the next 18-20 years.

Nationalizing the nation’s retirement system by taking money out of the private sector and nationalizing IRAs and 401(k)s would be a major step towards eliminating private retirement plans.

Consider how well government-run healthcare is going over and you’ll have a good idea of what nationalized retirement plans will do for your future.

Countering the Coming Triple Whammy

At this point, all indicators are that the next 4 years will likely bring continuing slow economic growth with a strong possibility of entering into a double dip recession. At the end of 4 more years, our national debt will likely stand at over $20 trillion. With higher taxes punishing business owners, it’s doubtful that unemployment will be coming down any time soon.

Even if the Bush tax cuts are allowed to expire and other taxes stay the same, the average middle-income American will be paying 29.6% more in taxes than they did last year. This means that for every $3,000 in taxes that they paid last year, they’ll be paying $4,000. Either way, taxes are going up and they’re going up noticeably.

Inflation is likely to become a factor as well, as is continuing market uncertainty and instability. These three obstacles combine to create a triple whammy for the unprepared.

The good news is that you don’t just have to sit back and hang on while the wild ride continues. You have options that can effectively position your retirement money to protect it from the coming triple whammy.

For instance, getting your serious money out of those 401(k)s and IRAs and into a tax-free vehicle allows you to accumulate your money tax-free from that day forward. Not only does your money grow tax-free, but also it distributes tax-free at retirement and ultimately transfers tax-free to your survivors when you pass away.

You also can link your returns to those things that inflate so rising inflation actually helps you rather than hinders you. Using an indexing strategy that links your money to the market without putting it directly at risk in the market, you can enjoy the upside anytime the economy grows; yet not lose a dime when the economy goes down.

These are just a few of the Missed Fortune strategies that have been providing the dream solution against higher taxes, inflation and market volatility for decades.

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*Life insurance policies are not investments and, accordingly, should not be purchased as an investment

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