Question: David - What is your thinking on
employee benefits, specifically retirements plans like
401K for example?
Answer: I have stated in the past that I thought
at some point the US Federal Government would require
some of those types of contributions to be put into US
debt! That is the US Bond market. Less and less
outsiders are buying the US paper and the Federal
Reserve is buying something like 85% of this
Dr. Jeff Lewis wrote an article recently and this is
what he had to say...The Possibility of a
Forced Treasury Allocation
"Even if there is no mandated minimum U.S.
Treasury bond allocation in pensions or 401k plans, even
worse things could be in store. If the trend follows the
healthcare and student loan template, no
company-sponsored retirement plans will probably exist
in just a generation.
Pension savers will very likely all get shunted
into a version of the Federal government's "Thrift
Savings Plan". In this scenario, you might expect a
mandatory 50% Treasury bond allocation in your pension
portfolio."
Salary Deferrals and Withdrawal Penalties
"Such a bail in plan could even include a
mandatory ten percent salary deferral for everyone
earning money in the United States, perhaps combined
with a roll-back of the tax-deductibility of those
deferrals. These may even be considered "contributions"
since you will see little back in return later on. As
such, the incentive for an employer to "match" your
pension plan contribution will become a relic of the
past.
Furthermore, the penalties for early withdrawal
will remain and will probably be made even more
draconian. For instance, an increased 30% penalty for
early withdrawal could be instituted versus the current
10% penalty, along with an increase in the non-penalized
withdrawal age from 59.5 to 65 or higher.
When things get really serious - yes, even more
serious than they are now - the retirement plan
marketplace is a big target hanging right over the
middle of the government's financial bull's eye. They
will come after these very tempting plans. And their
tax-haven value will very likely decline over time.
About the time the typical person will say that,
"it's not even worth it to contribute anymore", they
could easily mandate your contributions, in a similar
way to how the Social Security system is currently
funded."
If you go to
www.Silver123.net AND on the far left navigation bar
-- pull it down where is says Individual and choose
SilverSaver PMA. You will find an Employee Benefit
Program that allows gold and silver investments for
retirement. This is something we have been watching for
some time and will be reporting more details in future
TMR's and possibly in the e-letter as well.
David Morgan
Founder The Morgan Report-- Money, Metals, and Mining.
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