Enjoy your 8 free chapters from Prechter’s Conquer the Crash — the book that foresaw what others have missed.
March 16, 2010
By Editorial Staff
There is no question that Robert Prechter’s Conquer the Crash foresaw and explained nearly every chapter of today’s financial crisis, years before it happened. Enjoy your 8 free chapters from the book with this free Club EWI report; here’s a quick excerpt from chapter 23, “What To Do With Your Pension Plan.” Note especially the last two paragraphs.
Make sure you fully understand all aspects of your government’s individual retirement plans. In the U.S., this includes such structures as IRAs, 401Ks and Keoghs. If you anticipate severe system-wide financial and political stresses, you may decide to liquidate any such plans and pay whatever penalty is required. Why?
Because there are strings attached to the perk of having your money sheltered from taxes. You may do only what the government allows you to do with the money. It restricts certain investments and can change the list at any time. It charges a penalty for early withdrawal and can change the amount of the penalty at any time.
What is the worst that could happen? In Argentina, the government continued to spend more than it took in until it went broke trying to pay the interest on its debt. In December 2001, it seized $2.3 billion dollars worth of deposits in private pension funds to pay its bills.
In the 1930s, the world heard a lot of populist rhetoric about why “rich” people should be plundered for the public good. It is easy to imagine such talk in the next crisis, directed at requiring wealthy people to forfeit their retirement savings for the good of the nation.
With the retirement setup in the U.S., the government need not be as direct as Argentina’s. It need merely assert, after a stock market fall decimates many people’s savings, that stocks are too risky to hold for retirement purposes. Under the guise of protecting you, it could ban stocks and perhaps other investments in tax-exempt pension plans and restrict assets to one category: “safe” long-term U.S. Treasury bonds.
Then it could raise the penalty of early withdrawal to 100 percent. Bingo. The government will have seized the entire $2 trillion — or what’s left of it given a crash — that today is held in government-sponsored, tax-deferred 401K private pension plans. I’m not saying it will happen, but it could, and wouldn’t you rather have your money safely under your own discretion?
Chapter 13: Can The Fed Stop Deflation?
Chapter 23: What To do With Your Pension Plan
Chapter 28: How To Identify A Safe Haven
Chapter 29: Calling In Loans & Paying Off Debt
Chapter 30: What You Should Do If You Run A Business
Chapter 32: Should You Rely On The Government To Protect You?
Chapter 33: Short List of Imperative ‘Do’s’ & ‘Don’ts”
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One thought on “What To Do With Your Pension Plan”
I have a question for HPers who know more than I do.Istn’t the dolalr getting too strong even more of another nail in the coffin for American dominance?I mean if the Euro crashes and the pound becomes worthless against the dolalr. Doesn’t that make these countries more attractive to industry and exports i.e. like low wage countries to invest in? Where does that leave the US if the dolalr is too strong. Who will want to put up factories in the US?Where will that put the US worker?Especially with the shoddy infrastructure that a lot of the USA has.Europe currently has much better infrastructure in comparison to the US. I know that is a blanket statement and covers too much geographic area to truly compare but much of Europe has an enormously better electricity grid, better trained workers (not IT guys and software geeks but machinists, machine builders, assembly and robotics specialists etc.), especially in Germany and an established rail system for moving goods and people.What am I missing other than the obvious fact that everybody loves America and despite the shoddy infrastructure, and the thinly veiled hatred growing in the ranks of the populace (with one half ready to kill the other half i.e. libs vs. conservatives) and vice versa, America could essentially live off it’s own land and production.Does it really need to import goods and foreign oil to continue to operate?Couldn’t America just shrug and do everything itself?What am I missing
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