June 29, 2021
We’re harsh with Washington, D.C., but usually, we could always give the public sector credit for one maxim: nothing beats a government pension. But like a lot of cliches and 20th century thinking about finances, is that idea even valid anymore?
The fact is that pension plans nationally are in peril, with many of them only half-funded! Meanwhile, overseas, Europe’s trying to adapt to the ongoing pension crisis by bringing gold to the table: Swiss pension fund CPEV and Dutch fund DSM have lately announced adding the precious metal to their portfolios.
So, what are you to do if you just retired? Where’s the safest place to put your money? And who can you trust, exactly? Thankfully, we have the esteemed Dr. David Eifrig to illuminate the pension problem many Americans face today and the simple steps to take to ensure the preservation of your hard-earned wealth.
And don’t miss Doc’s life-changing retirement prediction – for a limited time, check out his recent webinar here! It’s a must-see for any retiree who cares about investing in their future and family.
The Great American Pension Crisis
A few years ago, my father passed away…
He was a brilliant physician… but unlike most surgeons, he didn’t have a lucrative private practice to support him in retirement. Instead, he was a professor at the University of North Carolina-Chapel Hill… a state employee.
And his wife, my stepmother – whom I’ve known and loved for more than 30 years – depends on the survivorship benefits from his pension. But unfortunately, that pension was hanging by a thread.
I’ve seen headlines for years about a “pension crisis” (as I’m sure you have too) and read occasional notes about small towns going bankrupt. I figured the pension problems were just fearmongering… or something that a little bailout from the federal government could fix.
I was wrong.
Then I dug into the numbers and discovered that, at the time, North Carolina’s state-sponsored pension funds were only 51.3% funded, right on the edge of the crisis point. It made me furious.
The more I dug, the more I realized how much danger facing my stepmother and millions of other retirees…
Nothing beats a government pension. If you (or a loved one) work for the government, you expect pension benefits to be there to support you for the rest of your life.
If you’re already retired, your check has shown up without fail, month after month. Your health care benefits are far better than most. And your money is practically inflation-proof, thanks to your cost-of-living adjustments.
Anyone would love to be promised those benefits in retirement. But what if that promise is an empty one? What if you work for decades… and have a big part of your promised compensation taken away from you?
This crisis isn’t hypothetical – it’s happening. And it’s going to happen to more folks soon.
I’m not sure if you remember books, America, but it’s what people used to sink their faces into to avoid dealing with family and strangers. Our editor-in-chief, P.J. O’Rourke, has written a few in his time, and he’s re-releasing his bestselling Eat the Rich, complete with a new chapter to take on the absurdity of 2021 economics. And as an American Consequences subscriber, you can have access to the newly released edition for free! Claim Your Copy Now.
A Real Retirement Nightmare
Public pensions nationwide are crumbling. Legal loopholes are widening. If you don’t take action to protect yourself and your loved ones, you could be left with nothing.
If you are currently retired, the coming American Pension Crisis could mean eliminating cost-of-living adjustments, higher health care premiums, or even cuts to your base pension check. If things are bad enough, you may suffer a ravaging “clawback” – where the government repossesses a considerable lump sum of your cash – and still cuts your monthly check.
Again, this is not hypothetical.
In 2001, most pensions were fully funded. Generally speaking, “well-funded” means above 80%. But 50% funding or less is considered the “crisis point.” It’s nearly impossible to come back from 50% or less.
According to a report from The Pew Charitable Trusts – an independent research organization – pensions in Colorado, Connecticut, Illinois, Kentucky, and New Jersey are less than 50% funded. New Jersey sits at the bottom of the list… its pension is only 31% funded.
If you’re one of the tens of millions of affected Americans, you should know… you have zero control over what happens.
You can’t increase or decrease the amount that’s invested. Also, companies hire managers who oversee the allocation of pension money investments. And the fees they charge dilute returns.
Plus, if you die right after you retire, your dependents might get nothing.
But there is a solution…
This former Goldman Sachs banker urges you to take these four vital steps right now to preserve your family’s wealth while you still can.
IRAs: Financial Freedom
You can move money from your pension into a self-directed individual retirement account (IRA).
IRAs give you total control of your money. You get to grow your capital tax-free, just like a pension… but there’s no limit on how much you can make.
A self-directed IRA is precisely what it sounds like… It puts you in charge of your investments.
Along with conventional investments you can make in a typical IRA – stocks, bonds, and covered-call options – an entirely self-directed IRA allows you to invest in many other assets, including real estate, private stocks, businesses, and even precious metals.
You can invest in just about anything, as long as you avoid any conflicts of interest. You can’t, for example, invest in companies where you have a 50% interest. But you can buy the house next door through your IRA and then rent it to a neighbor. You can also invest in a local small business (again, as long as it’s not your own).
I use my self-directed IRA to generate income by selling stock options. When I use this account for options trading, I don’t have to follow any accounting or tax requirements.
If you do all your trading inside a retirement account, you don’t have to report any trades to the IRS. The goal is to maximize your total returns as quickly and efficiently as you can… and get better returns than a pension could offer.
There are two ways to move your pension to an IRA…
One is to “rollover” the pension directly into an IRA. The broker or custodian you’re opening an IRA with should have all the necessary forms for you to fill out. I have mine with Fidelity and TD Ameritrade.
You can also take a lump-sum payment of your pension and then move the funds into an IRA. If you do this within 60 days of taking the lump sum, you’ll avoid a tax and the 10% early withdrawal penalty. (If you can, though, roll over the pension directly – you don’t want to risk incurring taxes and penalties.)
And make sure that you check with your employer’s pension-plan rules for any fine print. If you follow these basic steps, you’ll all be closer to realizing health, wealth, and most of all, an unforgettable retirement.
P.S. Again, click here to get Doc’s retirement prediction, where he gives away the name and ticker symbol of one little-known investment designed to protect your wealth against the devastating effects of extreme inflation. But hurry, this message will go offline soon.
Love us? Hate us? Let us know at [email protected].
Publisher, American Consequences
With Editorial Staff
June 29, 2021