Why you should never fund an IRA or 401k

Written by Andrew Henderson

Do you trust your government to make sound decisions? Do you trust them to protect your economic freedom? Then why would you trust a program they set up to keep your retirement savings safe?

No matter where you live in the world, your retirement account could be at risk. Bankrupt countries from Ireland to Hungary to Argentina and others have recently helped themselves to their citizens’ private wealth by dipping into retirement funds when they “needed” to.

Of course, the United States government has been using the Social Security trust fund as its private piggy bank for some time. Politicians merely kick the can down the road and use smoke and mirrors to hide their theft. They hope they’ll be long gone by the time the problem explodes. And if not, they’ll simply “borrow” some of your money.

If you were dropped into the jungle, would you be worried if a hungry crocodile was coming toward you? Just like the crocodile, governments get cranky when they’re not well-fed with other people’s money. And when there is no more money to take, do you think they’re going to let themselves starve?

Millions have learned the hard way that they’ll find whatever they can to snack on. Including money that’s yours. That being considered, I often ask myself why anyone would fund an IRA or 401(k). Once government has proven itself to be untrustworthy, why trust it by putting your money into a program it controls?

The fact is that, historically, government – including in the United States – loves to tinker with its own programs. “Improve” them, if you will. Situations come up where they need more money or wish they would have done something different. Unlike you or I who must abide by contracts, the government has no such requirement. If they decide to impose a tax on IRA accounts, they can. If they want to change the tax-free status of Roth IRAs, they will.

Or, they may just do what was done in Cyprus and impose a “tax” for the “well-being and stability of the country”.

Why anyone would put their money in a government-approved program that can be changed on a dime is beyond me. You see, the government isn’t as stupid as it looks. They’ve made programs like the IRA a roach motel of retirement savings. Money goes in, but doesn’t come out. Because you have to wait until at least 59-1/2 years old in the United States, government has literally decades to figure out to how extract that wealth from you if they so desire. If you smell something coming and want your money back, they charge you a penalty.

Because government always hits you coming and going.

In the United States, liberal politicians have been crafting programs to get more control of your money. Their first plan was the “Guarantee Retirement Account”. Recently, they’ve been discussing “Secure Choice Pensions” and “Automatic IRAs”.

These plans would all include mandatory purchases of US Treasuries. After all, someone has to buy them all. And the programs would not only force employers to participate; they’d force everyone to participate. Don’t want to own Treasuries or be part of the government plan? Then you’ll be subject to an extra tax on your existing IRA.

To the average American, it sounds great. What’s wrong with a Secure Pension, or a Guarantee Account? Many of these politicians ran campaign ads using pictures of craps tables and told seniors not to let conservatives “gamble their Social Security on Wall Street”. There was never any truth to that, but Big Government never lets facts get in the way of a sellable story.

But to anyone who trusted their own government, it’s a swift kick in the ass. There you were minding your own business, socking your own money away for retirement. Now, that same government wants to force you to hold their debt “or else”. And because government does whatever it wants, there’s nothing you can do about it.

Except watch your hard earned savings be further devalued and taxed away.

What will transpire exactly is, of course, unknown at this point. But I can assure you of this: Big Government will use as many words like “Secure” and “Freedom” and “Patriotic” to bamboozle the average American into complying. And for the remaining people who know the truth, they will force you to comply by labeling you as unpatriotic or a traitor for not wanting to “support your country”.

They’ll use words like “tax” and “levy” to describe the “reasonable” percentage of your money they’re taking from you. The mutual fund or bank holding your retirement account will gladly fork it over to Uncle Sam; they’re certainly not going to risk the ire of a tyrannical government. Just like at how Cyprus tried to sell the confiscation of bank accounts. They called it a “stability levy”. Remember those words because you may hear them again.

Except this time, the money at stake will be yours.

Those who believe in self-reliance know that your life, and your retirement, are your responsibility alone. Don’t let the government by your mooching friend by letting them on in the act. Don’t fall for the trap of a “tax write-off” or an “employer match”. If you’re wealthy enough, the write-off isn’t worth it. If you’re just starting out, the deduction won’t amount to much. Don’t follow the mindless herd into the trap of putting all your money under de facto government control.

Because history shows they’ll change the rules as they wish. And you’ll rarely be the beneficiary.

Andrew Henderson
Last updated: Dec 30, 2019 at 12:53PM

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1 Comment

  1. ShawnSzentmiklosy

    Dont give your money to the Government give it to this guy. Lol