(Newswire.net – May 24, 2013) Portland, OR — A senior staff official recently lamented that some people are accumulating “substantially more than is needed to fund reasonable levels of retirement saving.”
President Obama has calculated that Americans don’t “need” more than $205,000 per year in retirement. On that basis, he has decreed that we shouldn’t be able to amass a total balance of more than $3 million in IRAs, 401(k)s, and other tax-favored accounts. This amount would be when you add every available account together.
This appears to be a move that the government is poised to change the rules of the game and impose new restrictions on retirement accounts. It is simply another step in the direction of grabbing wealth out of IRAs and 401(k)s.
Team Obama has so far been vague about how this might be implemented. According to the Boston Globe, “The administration hasn’t explained how the cap would work. Officials haven’t said whether they would tax existing balances above $3 million or prevent people from adding more money to their accounts once they reach that amount.
The White House also didn’t say whether the limit would be indexed for inflation or whether it would affect defined-benefit pension plans.”
The bottom line is that if you’re a high net-worth investor who exceeds the $3 million threshold, or if you’re at risk of exceeding it in the near future, you should explore tax-efficient ways of socking away wealth outside of qualified retirement accounts.
They’ll only come under increasing attacks as the government’s funding crisis deepens.
And whatever you do, don’t keep your funds in a bank! The recent events in Cyprus have taught the world several things.
- Banks are still unhealthy. Bankers everywhere are up to their necks in bad loans and other worthless investments, and the real question is “who will take the hit on all the lousy bets.” If banks are allowed to fail, the creditors (depositors) could be wiped out. If the bureaucrats confiscate deposits directly, then savers are sure to take the hit. If central banks print the money needed to bail out the banks, then all currency holders (that’s you and me) stand to get crushed by inflation.
- Bank customers should expect no advance warning. What they will find when they go to their local branch are locked doors and ATM cards that no longer function. Anyone with 100% of their assets tied up in the financial system should take steps to diversify immediately. And if you are counting on access to those financial instruments stashed away in your safe deposit box, think again.
- Bank closures and deposit losses could even happen here in the U.S. The Federal Reserve will most likely bail out the U.S. Banks in the event of a financial crisis. Acting a lender of last resort is in all reality one of the Fed’s primary functions. It is the role they played during the 2008 financial meltdown. Surprisingly the officials in the EU didn’t press the “Print Now” button but instead choose door number two, outright seizure of funds right out of the unsuspecting populace bank accounts.
Author: Google+ Jan Johansen