Is the government looking to take control of your retirement plans and IRAs?

According to recent reports from Bloomberg and CNBC, government regulators are looking at a plan to require retirement plans, including IRAs, to “invest” in government issued retirement bonds or annuities rather than traditional investments.

The idea is that by investing in government bonds you’ll lower the risk in your retirement portfolio (along with a significant reduction in your overall rate of return). It’s for you own good, they say, as large swings in the stock market could cause significant losses for you.

The reality is other countries no longer want to finance the huge and growing debt of the United States. As countries like China decide not to loan the US more money by buying US Treasury debt, and in fact lower their holdings, who will be left to finance the huge deficits our country runs?

Apparently the government is looking at retirement plans as an option. This option could be invoked, or a number of similar plans, by the passing of a new law by Congress, by the implementation of new regulations by government regulators, or even by executive order by the President, should he deem it in the best interest of the country during an economic emergency.

In any case, if one of these scenarios pans out, you’ll have little to no warning. You need to decide if this is a risk worth taking when implementing a retirement plan for your business, or when deciding whether you’ll continue to offer one.

Retirement plans have trillions of dollars in them, dollars that are reporting to the government each year, dollars that have become an attractive target for funding further deficits and out of control debt. Your dollars … but for how long?

 

by Steven Schlagel