401K is a Private Retirement Fund under US Law
QUESTION: Martin,
I’m still fairly young, so I don’t have a lot saved in my retirement accounts yet, but I’ve been maxing out my IRA for the last few years to get the tax deduction. I worry because I’ve heard you and others talk about congress wanting to steal our 401k and IRA accounts to “save” social security and/or state pension funds. Do you think that is likely to happen, and will we have time to liquidate our retirement accounts before they steal them? What should we watch out for that would indicate congress is getting ready to move on our accounts?
I am not a lawyer, but I imagine this would take an act of congress to accomplish. Do you think something like this would be a swift action where they just seize them outright, or a gradual change through a combination of penalties and incentives that get people to move their money from private retirement accounts to a government one? If you were going to nationalize everyone’s retirement accounts, how would you do it?
Thanks for all you do,
Dave
ANSWER: I am very cautious about what I say. I never speak in speculation or hype. The markets have taught me that humility is the best course of action. So I will state bluntly when I know something to be a FACT. I try to be responsible and this is why I never comment on anyone else’s forecasts or even care to know what they say. I will respond to emails but will omit names. I am not here to be some politician who says the other guy is a piece of shit. I am not endorsing what anyone else has said about 401Ks.
So on this subject, it is a VERY SERIOUS ISSUE. I have reported on “lobbying” efforts that have been taking place behind the curtain from my direct sources. There are states looking for Congress to create some sort of mandatory contribution that would take from people’s private savings to bail out state workers. Nothing has been decided as of yet. However, I would expect this to become more forceful next year when Social Security goes bust.
We will be doing a special written report on this topic with suggestions that will not be provided on the blog. We are investigating alternatives right now. Far too many people read this blog and we do not require registration to enter the site. So this is economic freedom for all, but the price of that is opponents reading the blog as well. So it is best to make such recommendations off the blog so the whole world does not catch wind of this possible solution, which should be for clients only.
