To fully withdraw or not?
Moderator: Global Moderator
To fully withdraw or not?
Dear Forum members:
Some advice I’ve heard a lot is to get assets now in retirement funds (IRAs, 401k’s, 403b’s, etc.) out as quickly as possible. Most of these focus on some kind of confiscatory risk—that is, since there’s a lot of wealth tied up in such funds, if and when things get bad enough financially, the US government will appropriate them in some fashion (e.g., compel conversion to government sponsored annuities; impose new and steep taxes, either on the pre- or post-distribution funds). Like a lot of folks on the verge of retirement (I’m 65), the majority of my assets now sit in such funds, so this is a serious decision for me. For what it is worth, I’m debating a number of pros, cons, and alternatives. I’d be most grateful not only for general opinion and advice, but more specific reactions to these:
Cons:
1. If such confiscation does not come to pass, pulling everything out means that one takes at least two tax hits—a) being taxed at the highest income bracket for most of one’s withdrawn funds, and b) having to pay taxes on any future capital gains or income earned after the withdrawal (vs. such having such earnings accrue tax free within the retirement fund).
2. I understand that there is precedent and even a legal pretext for such actions elsewhere (e.g., the Cyprus buy-in; Poland in 2013; Argentina in 2008, etc.), but is such confiscation politically plausible in the U.S. (e.g., are the Congress and Supreme Court likely to ever become so deaf to public opinion and the Constitution that an administration could get away with it?)
3. Privately held funds (outside retirement accounts) could be as vulnerable to some form of confiscation as those in such accounts.
Pros:
1. If all one’s funds were “replaced”? with government IOU’s (Treasury bonds whose real purchasing value will dwindle as QE, ZIRP continues), one’s real retirement savings could soon be toast.
2. Income tax rates are certain to rise anyway, so one might as well pay now (and quickly) at the current lower rates as later (and slowly) at progressively rising rates.
3. Until and unless stricter capital controls are put in place, one could geographically diversify one’s withdrawal to provide at least some means of preserving one’s assets.
4. One has more flexibility about how one invests outside vs. inside retirement accounts (even the more flexible, self-directed ones)
Middle ground?:
1. Even though there are many disturbing signs of financial trouble ahead, it may be years until the s**t well and truly hits the fan. In the meantime, might one withdraw at an accelerated pace (that is, faster than one’s living costs require), perhaps using tax bracket cutoffs as targets, and achieve some/most of the benefits of an immediate and total cash-out while avoiding the worst of the tax bite.
I’ve heard and read enough to know that there are lots of folks who have resolved these questions in their own minds, and are certain that one is either an idiot to cash-out or and idiot not to cash-out. I’m hoping that some of the thoughtful and well-informed people on this forum who, like me, are not so certain may have considered this issue and can offer useful advice.
Some advice I’ve heard a lot is to get assets now in retirement funds (IRAs, 401k’s, 403b’s, etc.) out as quickly as possible. Most of these focus on some kind of confiscatory risk—that is, since there’s a lot of wealth tied up in such funds, if and when things get bad enough financially, the US government will appropriate them in some fashion (e.g., compel conversion to government sponsored annuities; impose new and steep taxes, either on the pre- or post-distribution funds). Like a lot of folks on the verge of retirement (I’m 65), the majority of my assets now sit in such funds, so this is a serious decision for me. For what it is worth, I’m debating a number of pros, cons, and alternatives. I’d be most grateful not only for general opinion and advice, but more specific reactions to these:
Cons:
1. If such confiscation does not come to pass, pulling everything out means that one takes at least two tax hits—a) being taxed at the highest income bracket for most of one’s withdrawn funds, and b) having to pay taxes on any future capital gains or income earned after the withdrawal (vs. such having such earnings accrue tax free within the retirement fund).
2. I understand that there is precedent and even a legal pretext for such actions elsewhere (e.g., the Cyprus buy-in; Poland in 2013; Argentina in 2008, etc.), but is such confiscation politically plausible in the U.S. (e.g., are the Congress and Supreme Court likely to ever become so deaf to public opinion and the Constitution that an administration could get away with it?)
3. Privately held funds (outside retirement accounts) could be as vulnerable to some form of confiscation as those in such accounts.
Pros:
1. If all one’s funds were “replaced”? with government IOU’s (Treasury bonds whose real purchasing value will dwindle as QE, ZIRP continues), one’s real retirement savings could soon be toast.
2. Income tax rates are certain to rise anyway, so one might as well pay now (and quickly) at the current lower rates as later (and slowly) at progressively rising rates.
3. Until and unless stricter capital controls are put in place, one could geographically diversify one’s withdrawal to provide at least some means of preserving one’s assets.
4. One has more flexibility about how one invests outside vs. inside retirement accounts (even the more flexible, self-directed ones)
Middle ground?:
1. Even though there are many disturbing signs of financial trouble ahead, it may be years until the s**t well and truly hits the fan. In the meantime, might one withdraw at an accelerated pace (that is, faster than one’s living costs require), perhaps using tax bracket cutoffs as targets, and achieve some/most of the benefits of an immediate and total cash-out while avoiding the worst of the tax bite.
I’ve heard and read enough to know that there are lots of folks who have resolved these questions in their own minds, and are certain that one is either an idiot to cash-out or and idiot not to cash-out. I’m hoping that some of the thoughtful and well-informed people on this forum who, like me, are not so certain may have considered this issue and can offer useful advice.
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Re: To fully withdraw or not?
Its 99.5% doom porn if you're in the USA.
But what is logistically feasible is directing trustees to make sure that a portion of their custodian assets are invested in Treasury Bonds of which you would be required to do yourself in your own accounts. It's not an overt confiscation, its voluntary compliance! Its possible this could happen someday, but its not a bad thing from within a PP context since we all need bonds to hedge the equity.
If you withdraw substantially equal amounts each year from your retirement accounts over your remaining life expectancy, no taxes or penalties are imposed.
You can also "offshore" your retirement accounts by using a trustee that allows you to access alternative investments.
Its not a bad idea to diversify sovereign risk, but killing the golden goose may be going too far.
But what is logistically feasible is directing trustees to make sure that a portion of their custodian assets are invested in Treasury Bonds of which you would be required to do yourself in your own accounts. It's not an overt confiscation, its voluntary compliance! Its possible this could happen someday, but its not a bad thing from within a PP context since we all need bonds to hedge the equity.
If you withdraw substantially equal amounts each year from your retirement accounts over your remaining life expectancy, no taxes or penalties are imposed.
You can also "offshore" your retirement accounts by using a trustee that allows you to access alternative investments.
Its not a bad idea to diversify sovereign risk, but killing the golden goose may be going too far.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: To fully withdraw or not?
I'm curious as to where you are hearing this advice.Bordersscotsman wrote: Some advice I’ve heard a lot is to get assets now in retirement funds (IRAs, 401k’s, 403b’s, etc.) out as quickly as possible.
Extreme SHTF scenarios like what you are describing are obviously within the realm of possibility but I would be very dubious about anyone who is claiming that it is just around the corner and you need to act "as quickly as possible". I just can't see waking up tomorrow and hearing on CNN that the government has seized all of your tax-deferred assets. Things like that just don't happen overnight.
If you are that worried about it, why don't you just withdraw enough to help you stop worrying - and if you don't own some physical gold outside your IRA as is recommended you'll find that goes a long way to help you quit worrying about these kinds of scenarios.
Last edited by ns3 on Wed Apr 16, 2014 7:19 am, edited 1 time in total.
Re: To fully withdraw or not?
If we keep electing Democrats, I have no doubt that they will make a play for retirement accounts at some point. They have an insatiable appetite for taking money from those that have it, to give it to those that don't.
This is basically one of the lines in the sand that would send me into a full fledged revolutionary mode. Freedom of speech, right to bear arms, private property.'
You take any of those and I no longer subscribe this government.
This is basically one of the lines in the sand that would send me into a full fledged revolutionary mode. Freedom of speech, right to bear arms, private property.'
You take any of those and I no longer subscribe this government.
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Re: To fully withdraw or not?
They can do anything they want. They have all the guns. But think about this: if things have gotten so bad that they're replacing assets in tax-sheltered accounts with government bonds, why wouldn't they be doing the same in taxable accounts? Savings accounts? Heck, why not just take it all and replace it with some kind of worthless IOU scrip that nobody accepts and that has no tradable value domestically or internationally?
If you're really so worried about the U.S. government doing such types of things, you should either leave the country or make whatever preparations you believe necessary to survive and thrive during a revolution or civil war.
If you're really so worried about the U.S. government doing such types of things, you should either leave the country or make whatever preparations you believe necessary to survive and thrive during a revolution or civil war.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
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Re: To fully withdraw or not?
It's almost always best to hedge your bets if you have competing considerations.
Personally, if government starts to get grabby with retirement accounts, the best position you can be in, without blowing up my brackets, I might be doing Roth conversions, putting myself in a position to eventually to remove it all if I have to.
I might also take money out, but it would be out of my Roth basis, not my IRA...
HOPEFULLY, if anything really nasty happens, it's slow, clumsy enough so I can get my money out of my Roth without the tax laws changing retroactively or something like that.
Personally, if government starts to get grabby with retirement accounts, the best position you can be in, without blowing up my brackets, I might be doing Roth conversions, putting myself in a position to eventually to remove it all if I have to.
I might also take money out, but it would be out of my Roth basis, not my IRA...
HOPEFULLY, if anything really nasty happens, it's slow, clumsy enough so I can get my money out of my Roth without the tax laws changing retroactively or something like that.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
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Re: To fully withdraw or not?
jim sinclair has been banging this drum starting at least a few yrs ago.
Teresa Ghilarducci )proposed some draconian changes to these accts a few years ago to congress
PS...re your para 1...bcuz its lawful whereby you are Not the acct owner...but just the beneficiary!....so changing the rule is less problematic than outright theft of taxable acct you own...maybe a lawyer can confirm?
Teresa Ghilarducci )proposed some draconian changes to these accts a few years ago to congress
PS...re your para 1...bcuz its lawful whereby you are Not the acct owner...but just the beneficiary!....so changing the rule is less problematic than outright theft of taxable acct you own...maybe a lawyer can confirm?
Last edited by murphy_p_t on Thu Apr 17, 2014 1:53 am, edited 1 time in total.
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Re: To fully withdraw or not?
MG...u seem to thnk these bonds would be marketable/volatile....
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Re: To fully withdraw or not?
these accts are where the "gold" is today...not in safe boxes of old
Re: To fully withdraw or not?
I'm thinking a more likely scenario than seizing all of the accounts would be the levy of a tax "shared responsibility payment" on MRD's over a certain amount. And another scenario might be reducing your SS payment depending on the amount of your MRD.
Either way, the government wins and you lose.
Either way, the government wins and you lose.
- Pointedstick
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Re: To fully withdraw or not?
Lawful schmawful. "Lawful" is just a fancy way of saying "allowed by those who have the most capability to inflict violence in society." When we're talking about actions taken by those people themselves, it should be obvious that the law is no regulation or constraint on the very body that makes or changes the law.murphy_p_t wrote: PS...re your para 1...bcuz its lawful whereby you are Not the acct owner...but just the beneficiary!....so changing the rule is less problematic than outright theft of taxable acct you own...maybe a lawyer can confirm?
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
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Re: To fully withdraw or not?
And you were wondering if it was how to ensure or prevent all those potential little MangoMans!MangoMan wrote: How disappointing to find, upon reading the first post, that this topic was about retirement accounts...
Interesting topic either way though.
DNA has its own language (code), and language requires intelligence. There is no known mechanism by which matter can give birth to information, let alone language. It is unreasonable to believe the world could have happened by chance.
Re: To fully withdraw or not?
Guys, we're in the strategic realm here... not philosophical. This is where PS lives. "Legal" is just a bs term. As is "rights," and "constitutional." Get those out of your head. Look at REALITY. Not just today's reality, but potential future realities. Legality is only one piece of that, and it's one that can change very easily, be manipulated, or gotten-around.Pointedstick wrote:Lawful schmawful. "Lawful" is just a fancy way of saying "allowed by those who have the most capability to inflict violence in society." When we're talking about actions taken by those people themselves, it should be obvious that the law is no regulation or constraint on the very body that makes or changes the law.murphy_p_t wrote: PS...re your para 1...bcuz its lawful whereby you are Not the acct owner...but just the beneficiary!....so changing the rule is less problematic than outright theft of taxable acct you own...maybe a lawyer can confirm?
Now I'm definitely not one of these dooms-dayers when it comes to your retirement accounts, and I DO believe our multi-tiered and fire-walled government system is a GOOD one that lends itself to checks & balances and more legal security than what otherwise might be the case in more monolithic governments, but don't think look at laws other than in the context about how they MIGHT have an affect on REALITY, and for how long you can expect that reality to hold in your favor.
But to me, in REALITY, the agents of government have to get reelected, and there are FAR easier ways for them to get the economic results for themselves that they want other than making us reinvest our funds. There are also, in reality, Wall Street lobbies they have to appease. And even the most left wing nutbag tends to have a few of them in his back pocket.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
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Re: To fully withdraw or not?
I am in the strategic realm here. The fact that the government could murder you, me, and everybody we know doesn't mean they will. The backlash would be intense, and it would lead to their own deaths.moda0306 wrote: Guys, we're in the strategic realm here... not philosophical. This is where PS lives. "Legal" is just a bs term. As is "rights," and "constitutional." Get those out of your head. Look at REALITY. Not just today's reality, but potential future realities. Legality is only one piece of that, and it's one that can change very easily, be manipulated, or gotten-around.
That's why I don't worry too much about retirement account confiscation. Can you imagine the outrage and backlash? Every politician who voted for it would be booted out of office. The sitting president who signed it would be impeached. Heads would roll.
If these things didn't happen, it would be a sign that the strain of "fuck the rich" socialism in the culture had gotten so intense that the USA was no longer a hospitable country for people or means to live in.
At least, that's the way I see it.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
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Re: To fully withdraw or not?
Exactly... I think the writing will be on the wall socially LONG before this even has a chance of happening. Not because of legal reasons... but because of the vested interests of elected officials.Pointedstick wrote:I am in the strategic realm here. The fact that the government could murder you, me, and everybody we know doesn't mean they will. The backlash would be intense, and it would lead to their own deaths.moda0306 wrote: Guys, we're in the strategic realm here... not philosophical. This is where PS lives. "Legal" is just a bs term. As is "rights," and "constitutional." Get those out of your head. Look at REALITY. Not just today's reality, but potential future realities. Legality is only one piece of that, and it's one that can change very easily, be manipulated, or gotten-around.
That's why I don't worry too much about retirement account confiscation. Can you imagine the outrage and backlash? Every politician who voted for it would be booted out of office. The sitting president who signed it would be impeached. Heads would roll.
If these things didn't happen, it would be a sign that the strain of "fuck the rich" socialism in the culture had gotten so intense that the USA was no longer a hospitable country for people or means to live in.
At least, that's the way I see it.
The AARP lobby alone would decimate anything that would drastically change a retiree's options in overt ways like that.
Love 'em or hate 'em. The AARP is probably a pretty good insurance policy against this kind of tomfoolery.
However, I'll be watching carefully for smaller rules (the cap on IRA assets that we talked about here months ago, if not over a year ago). It's good to have your ear to the street on this stuff. You usually can make strategic moves before it becomes law to lessen its effect.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
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Re: To fully withdraw or not?
I was hoping that this line of reasoning would have saved us from Obamacare. Takeover of what, 1/6 of nation's economy? Massive wealth transfers. Benefits insurance giants largely to the exclusion of nearly everyone else. Supreme Court provided no relief. My hope was misplaced.moda0306 wrote: Now I'm definitely not one of these dooms-dayers when it comes to your retirement accounts, and I DO believe our multi-tiered and fire-walled government system is a GOOD one that lends itself to checks & balances and more legal security than what otherwise might be the case in more monolithic governments, but don't think look at laws other than in the context about how they MIGHT have an affect on REALITY, and for how long you can expect that reality to hold in your favor.
But to me, in REALITY, the agents of government have to get reelected, and there are FAR easier ways for them to get the economic results for themselves that they want other than making us reinvest our funds. There are also, in reality, Wall Street lobbies they have to appease. And even the most left wing nutbag tends to have a few of them in his back pocket.
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Re: To fully withdraw or not?
Allow me to anticipate the response:murphy_p_t wrote:I was hoping that this line of reasoning would have saved us from Obamacare. Takeover of what, 1/6 of nation's economy? Massive wealth transfers. Benefits insurance giants largely to the exclusion of nearly everyone else. Supreme Court provided no relief. My hope was misplaced.moda0306 wrote: Now I'm definitely not one of these dooms-dayers when it comes to your retirement accounts, and I DO believe our multi-tiered and fire-walled government system is a GOOD one that lends itself to checks & balances and more legal security than what otherwise might be the case in more monolithic governments, but don't think look at laws other than in the context about how they MIGHT have an affect on REALITY, and for how long you can expect that reality to hold in your favor.
But to me, in REALITY, the agents of government have to get reelected, and there are FAR easier ways for them to get the economic results for themselves that they want other than making us reinvest our funds. There are also, in reality, Wall Street lobbies they have to appease. And even the most left wing nutbag tends to have a few of them in his back pocket.
"Well, it's not perfect, and sometimes it fails, but it's clearly better than things that are worse, which in my estimation is everything that it's not."
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
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Re: To fully withdraw or not?
Takeover? Hardly. First off, Medicare is already part of the health insurance economy, as is Medicaid. Secondly, health insurance is only one aspect of healthcare. It has expenses of its own, to be sure (too many in our system in fact), but it's essentially the payment mechanism to our doctors and nurses. Thirdly, there is no public option, but simply more regulation of existing insurance options to have them provide more coverage and issue a community rating, but still set prices in a marketplace based on those constraints.murphy_p_t wrote:I was hoping that this line of reasoning would have saved us from Obamacare. Takeover of what, 1/6 of nation's economy? Massive wealth transfers. Benefits insurance giants largely to the exclusion of nearly everyone else. Supreme Court provided no relief. My hope was misplaced.moda0306 wrote: Now I'm definitely not one of these dooms-dayers when it comes to your retirement accounts, and I DO believe our multi-tiered and fire-walled government system is a GOOD one that lends itself to checks & balances and more legal security than what otherwise might be the case in more monolithic governments, but don't think look at laws other than in the context about how they MIGHT have an affect on REALITY, and for how long you can expect that reality to hold in your favor.
But to me, in REALITY, the agents of government have to get reelected, and there are FAR easier ways for them to get the economic results for themselves that they want other than making us reinvest our funds. There are also, in reality, Wall Street lobbies they have to appease. And even the most left wing nutbag tends to have a few of them in his back pocket.
So you're taking the payment mechanism of 1/6 of the economy and regulating parts of it that you didn't before.
This isn't a "take-over." This is the most conservative (and a surprisingly hap-hazard) method of providing universal healthcare (all most-recent mentioned conservative methods do nothing of the sort). The more simple method would have been Medicare for all, which would have been a "take-over" of health insurance, which is only the payment mechanism of actual healthcare. It would have had significant affects on our healthcare providers, but definitely wouldn't have been a "take-over."
Regarding who benefits, I'd imagine I know, at the very least, that those previously uninsurable under our system are mostly grateful for the ACA.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
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Re: To fully withdraw or not?
Except for the ones who are too poor to afford the high unsubsidized prices, but too "rich" to qualify for subsidies. Several of my old college buddies are in this situation. Their previous solution was private employment that they were terrified of losing for fear of going uninsured and being denied for "pre-existing conditions", but now, their existing employer-provided health insurance costs have risen as well to the point where they too are becoming unaffordable.moda0306 wrote: Regarding who benefits, I'd imagine I know, at the very least, that those previously uninsurable under our system are mostly grateful for the ACA.
It's about cost. It's too high. Trying to rejigger the system to push some of it onto other people or subsidize other parts of it is doomed to fail of the cause of the rising costs is not identified and fixed.
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Re: To fully withdraw or not?
Bordersscotsman...you're very welcome to these threads.
Middle ground sounds prudent, seeing how the stock market seems to be holding up. If / when market resumes 2008-style crash, be on lookout for the the greedy politicians bringing Ghilarducci's proposals onto the front burner, under the guise of "protecting" the small retiree.
If some of your funds are in Roth, you might look into withdrawing what you can tax-free. (Either "basis"? now, or whole thing when you reach the age?)
How closely have you looked into self-directed IRAs? Maybe to buy something illiquid like rental property. Or an overseas gold holding.
I suspect you've also heard about "bail-in" rather than "bail-out" being the model moving forward? I've been sure to no leave huge sums of cash sitting in brokerage accounts...which just gets shifted into some bank acct w/ insufficient FDIC insurance....I've tried to avoid that risk holding T-bills and Treasury-only MMFs for cash, per HB recommendation.
Personally, I find having some geographic diversification allows me sleep much better.
In my mind, all or nothing approaches require a well-tuned crystal ball, not just of what will happen, but even more difficult, the "when". If any of us have that crystal ball, there's no need for a PP!
Also, to play devil's advocate, be sure to consider the motives of the doomers, esp the ones selling things (kinda goes w/out saying.)
Also, you might tune in to Jim Rickards where he talks on financial repression. I bring this up because he talks about banks being forced by US gov't to hold increasing amounts of bonds to finance debt and keep rates low...the gov't needs buyers as they do less QE...seems this could prolong how soon the gov't would need to seek other funding sources f(ie your IRA).
I'm not a financial planner & don't know your details...so take all comments here for what you think they're worth.Bordersscotsman wrote: Dear Forum members:
Some advice I’ve heard a lot is to get assets now in retirement funds (IRAs, 401k’s, 403b’s, etc.) out as quickly as possible. Most of these focus on some kind of confiscatory risk—that is, since there’s a lot of wealth tied up in such funds, if and when things get bad enough financially, the US government will appropriate them in some fashion (e.g., compel conversion to government sponsored annuities; impose new and steep taxes, either on the pre- or post-distribution funds). Like a lot of folks on the verge of retirement (I’m 65), the majority of my assets now sit in such funds, so this is a serious decision for me. For what it is worth, I’m debating a number of pros, cons, and alternatives. I’d be most grateful not only for general opinion and advice, but more specific reactions to these:
Cons:
1. If such confiscation does not come to pass, pulling everything out means that one takes at least two tax hits—a) being taxed at the highest income bracket for most of one’s withdrawn funds, and b) having to pay taxes on any future capital gains or income earned after the withdrawal (vs. such having such earnings accrue tax free within the retirement fund).
2. I understand that there is precedent and even a legal pretext for such actions elsewhere (e.g., the Cyprus buy-in; Poland in 2013; Argentina in 2008, etc.), but is such confiscation politically plausible in the U.S. (e.g., are the Congress and Supreme Court likely to ever become so deaf to public opinion and the Constitution that an administration could get away with it?)
3. Privately held funds (outside retirement accounts) could be as vulnerable to some form of confiscation as those in such accounts.
Pros:
1. If all one’s funds were “replaced”? with government IOU’s (Treasury bonds whose real purchasing value will dwindle as QE, ZIRP continues), one’s real retirement savings could soon be toast.
2. Income tax rates are certain to rise anyway, so one might as well pay now (and quickly) at the current lower rates as later (and slowly) at progressively rising rates.
3. Until and unless stricter capital controls are put in place, one could geographically diversify one’s withdrawal to provide at least some means of preserving one’s assets.
4. One has more flexibility about how one invests outside vs. inside retirement accounts (even the more flexible, self-directed ones)
Middle ground?:
1. Even though there are many disturbing signs of financial trouble ahead, it may be years until the s**t well and truly hits the fan. In the meantime, might one withdraw at an accelerated pace (that is, faster than one’s living costs require), perhaps using tax bracket cutoffs as targets, and achieve some/most of the benefits of an immediate and total cash-out while avoiding the worst of the tax bite.
Middle ground sounds prudent, seeing how the stock market seems to be holding up. If / when market resumes 2008-style crash, be on lookout for the the greedy politicians bringing Ghilarducci's proposals onto the front burner, under the guise of "protecting" the small retiree.
If some of your funds are in Roth, you might look into withdrawing what you can tax-free. (Either "basis"? now, or whole thing when you reach the age?)
How closely have you looked into self-directed IRAs? Maybe to buy something illiquid like rental property. Or an overseas gold holding.
I suspect you've also heard about "bail-in" rather than "bail-out" being the model moving forward? I've been sure to no leave huge sums of cash sitting in brokerage accounts...which just gets shifted into some bank acct w/ insufficient FDIC insurance....I've tried to avoid that risk holding T-bills and Treasury-only MMFs for cash, per HB recommendation.
Personally, I find having some geographic diversification allows me sleep much better.
In my mind, all or nothing approaches require a well-tuned crystal ball, not just of what will happen, but even more difficult, the "when". If any of us have that crystal ball, there's no need for a PP!
Also, to play devil's advocate, be sure to consider the motives of the doomers, esp the ones selling things (kinda goes w/out saying.)
Also, you might tune in to Jim Rickards where he talks on financial repression. I bring this up because he talks about banks being forced by US gov't to hold increasing amounts of bonds to finance debt and keep rates low...the gov't needs buyers as they do less QE...seems this could prolong how soon the gov't would need to seek other funding sources f(ie your IRA).
- MachineGhost
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Re: To fully withdraw or not?
It didn't happen the way you see it in other countries. What makes us a super exception? You underestimate the stupidity of the powerless American. Even most in here would not take up arms against such a proposition when push came to shove. I know I wouldn't because I prefer to fight battles I can win.Pointedstick wrote: At least, that's the way I see it.
Besides, MT is our early warning radar system. He works in the retirement industry. He would let us know way before the mainstream media caught on (by which then it would be too late).
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
- MachineGhost
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Re: To fully withdraw or not?
While there are some hare-brained aspects about Obamacare that are less than ideal, you're overexaggerating in typically Faux right-wing fashion. Need I remind you that Obamacare is a conservatively-constructed approach to health care? Ignore the left and right propaganda about it and look at the facts, not hyperbole claims.murphy_p_t wrote: I was hoping that this line of reasoning would have saved us from Obamacare. Takeover of what, 1/6 of nation's economy? Massive wealth transfers. Benefits insurance giants largely to the exclusion of nearly everyone else. Supreme Court provided no relief. My hope was misplaced.
Bottome Line: We need a collective risk pool that covers everyone for insurance to continue to work. As I predicted, everyone now refuses to give up the advantages and the Republicans have acquisied in defeat by co-opting those same provisions in their own go-nowhere legislation. What a no brainer.
I'm actually surprised, but some of the reforms are already working. Especially the payment for outcomes instead of for volume. Doh!
Last edited by MachineGhost on Thu Apr 17, 2014 11:04 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
- MachineGhost
- Executive Member
- Posts: 10054
- Joined: Sat Nov 12, 2011 9:31 am
Re: To fully withdraw or not?
Rickards is also a doom porner.murphy_p_t wrote: Also, you might tune in to Jim Rickards where he talks on financial repression. I bring this up because he talks about banks being forced by US gov't to hold increasing amounts of bonds to finance debt and keep rates low...the gov't needs buyers as they do less QE...seems this could prolong how soon the gov't would need to seek other funding sources f(ie your IRA).
Would you rather banks hold subprime mortgages instead of US Treasuries? It's part of the reformed Tier I capital requirments as passed by the Bank for International Settlements for its worldwide members. This is a good thing, not bad. US banks are now in better position than European banks in terms of reserves and quality of those reserves. BTW, gold is now accepted as Tier 1 capital.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: To fully withdraw or not?
Why do you think this MG?MachineGhost wrote: Bottome Line: We need a collective risk pool that covers everyone for insurance to continue cease to work.
The way I see it, if everyone is covered, including people with pre-existing conditions then it is no longer insurance....it's welfare. Therefore I made a slight adjustment to your sentence.
Last edited by Kshartle on Fri Apr 18, 2014 4:55 am, edited 1 time in total.
Re: To fully withdraw or not?
This is ad hominem and the Excluded Middle fallacy or False Dichotomy. Calling him a doom porner doesn't change his argument about banks being forced to loan to the government and certainly there are other options to treasuries than subprime for bank assets.MachineGhost wrote:Rickards is also a doom porner.murphy_p_t wrote: Also, you might tune in to Jim Rickards where he talks on financial repression. I bring this up because he talks about banks being forced by US gov't to hold increasing amounts of bonds to finance debt and keep rates low...the gov't needs buyers as they do less QE...seems this could prolong how soon the gov't would need to seek other funding sources f(ie your IRA).
Would you rather banks hold subprime mortgages instead of US Treasuries?
How is it a good thing that the government forces banks to loan it money? Isn't that inflationary? Isn't that banks creating money out of thin air to loan to the government for it's welfare/warfare schemes? If they aren't creating then they're taking depositors money and loaning it to the government rather than finding productive investments since the government can only make good on the loan by printing or taxing (both theft) of the same depositors!