That’s right – seeking to follow up on his SPECTACULAR efforts to fix your healthcare, Obama now wants to fix your retirement. Last week’s State of the Union speech was downright terrifying to red-blooded Americans who care about the Constitution, about checks and balances, about the free market… and about financial freedom.
Why is this new plan – officially dubbed “MyRA” – so terrifying? Why is it really so awful to offer a payroll deduction retirement option to people who work in jobs that don’t have that in their benefits? After all, the state of our retirement savings, as a nation, couldn’t be bleaker.
Oh yes, we are well aware of the abysmal state of Americans’ retirement plans, with inflation making the effort futile for most.
The problem is the MyRA doesn’t solve the problems that need solving. When the contribution limit is only $15,000 total – not per year, but TOTAL – this is not a retirement account that will do much good for anybody.
But some saving is better than none, people say. It gets people accustomed to the idea, and they start developing better savings habits, people say. Those same people would say that the MyRA is simply meant as a stepping stone, as after the account balance reaches $15,000, it needs to be rolled over to a conventional IRA.
The problem is that the Obamafund doesn’t just roll itself over on its own. People will have to figure out how to do that themselves; and if they can’t be bothered to start a conventional IRA on their own in the first place, who is to say they won’t simply max it out and leave it there? Especially when the government has put a guarantee on the principle in the Obamafund (but in the IRA, it can be lost)?
No. Obamafunds solve exactly ZERO problems where the retirement security of Americans is concerned. What it DOES do is put the camel’s nose under the tent for gaining government access and control of more of Americans’ retirement funds, which our bureaucrats have dearly longed to do for years. You can almost imagine their minds at work: There are so many problems that that would solve! But think of the “problems” that Congress has “solved” by raiding the so-called “Social Security Lock Box” and replacing all funds there with government IOUs. Do you think these same people deserve MORE control over our retirement funds? And yet, investments in Obamafunds will be limited to government bonds. FANTASTIC.
It may seem innocuous now; but when government puts in place a program that solves no problems yet sets up channels to funnel money to its own bonds, you can make a pretty safe bet that eventually, it has the potential to be in a position to divert money from the private sector into government, right where the government thinks it belongs. It might be simple changes in tax policy. Maybe it’s “not fair” that private retirement accounts make a decent return, above stated inflation or above what the Obamafunds make. Maybe coupled with that, the $15,000 limit would be lifted to incentivize more money into government sponsored/controlled/guaranteed accounts that benefit the government, while private accounts and private investment gets pummeled through taxation.
Who knows where this is going; but the way it is presented, it makes little sense. There is information and motivation the administration is not being forthcoming about. Our advice is to be on guard, and yes, maintain your regular additions to your gold-backed IRA account. If you don’t yet have one, find out how you can get started here.
Peter Reagan is a market strategist for Birch Gold Group, the Precious Metal IRA Specialists. As one of the nation’s leaders in gold and silver investing, Birch Gold helps clients protect their savings from inflation and the declining dollar. Find Peter Reagan on Google+.
Photo credit: Alex Abian (Also on flickr.com/alexabian)