Your retirement questions answered

It's almost a given that the money system as we know it today may not be around in the next 20 - 30 years when most people my age will hit retirement to withdraw their funds. Therefore, these funds are at risk.

Many people (including myself) are looking to uncap the potential for these funds for use now to build a resilient lifestyle in preparation for an upcoming collapse, so my question is, is there a way to use our retirement funds (here in Australia we call it a self managed superannuation fund) within the confines of the law to invest in our own resilience now?

FYI

In Australia, a self managed superannuation fund allows for anyone to obtain their retirement funds in a bank account in the form of cash to invest in whatever he/she see's fit providing they do not derive a direct benefit from it. There are of course, a number of ways to bend this rule (investing in rare artwork, classic cars etc). I'm interested in ways of bending the rules enough to satisfy the government but still derive a direct benefit to build resilience (purchasing land for example).

Deana

Given the recent problems with firms such as MF Global where clients have lost funds in supposedly segregated accounts, is there a way to have any IRA assets (e.g., stocks, bonds) held in some other form than the broker or custodian's "street name" so that title to the assets would be clear in the event of a bankruptcy?

I have an engineering degree, and I've been working in financial services for 8 years... Yet I still don't have an answer for this one:

My parents are 60-year-old single-income self-employed empty-nesters.  They pay $18,000 (that's eighteen thousand) per year for health insurance.  In addition to that, they always blow through their $2,000 deductibles, and often wind up paying for various other services out of pocket.  At the end of the day, they spend about $25,000 per year on healthcare.

Because of healthcare costs, my parents cannot retire.

What should they do?

Net worth is about $900,000.  All in real estate (They didn't listen to me).  Dad is in good health.  Mom has diabetes. 

I keep telling them they should just pay for catastrophic, and find a cash doctor for the rest.  But their generation is paranoid about being uninsured, and catastrophic is expensive too.

If PMs are parked in an IRA, what is the taxation on withdrawal from the IRA, compared to the 28% gain tax on selling PMs out of hand.  It would seem that the PMs would be sold from the IRA and then cash withdrawn would be taxed based on the individual's bracket for that year.  Correct?

- Jim

I just had this conversation with my accountant.  He said that anything coming out of an traditional IRA is taxed as income in whatever bracket you happen to be in (when distribution of IRA is added to other income).  That would presumably be whatever PMs are valued at in dollars when you take the distribution.

Doug

Like several others, I am researching the use of self directed IRA(s) and I would love to see / hear / read any specific details along the lines of:

- criteria for selecting a custodian in general and any particular criteria that would relate to specific objectives (like holding hard assests, funding a business, international / sovereign diversification)

- how to hold PM's in an IRA such that I would be able to audit the segregated holdings personally (ie visit the depository unannounced and examine a specific lock-box with MY metal in it)

- funding an LLC that I would managed that could also accept deposits (sell shares) from / to others (family, friends ...) somehwat like an investment company or investing club

- holding assets internationally in a self directed IRA

- holding securities by direct registration or certification

My overall objective is to achieve as much direct control over the assets, be they physical assets or documents evidencing ownership interests or deposits in financial institutions, without violating US laws. I am no longer comfortable with promises from governments or fancy looking brokerage statements coming from allegedly trustworthly fiduciaries. (Can you spell MF Global?) To the extent that I could offer to manage such benefits for friends and family that would be a bonus.

I'm brand new here and still poking around.  My apologies if these issues have been addressed already. It's great to find others who are capable of thinking outside the box.

My plan is to leave a private sector job at 59 1/2, use my pension and 401k withdrawals to bridge until 66 1/2 and then begin collecting my fuil social security amount. What is the impact on my social security payout if I do leave my job at 59 1/2 versus continuing to work? Thx!

I have a whole life policy with a cash value over $64,000.  How can i get access to this cash value because it might not be so much in a short while.  Should i try to borrow against it.  Sell the policy?  I should say i have 1 son in college,  1 son soon to be a senior in high school and a daughter in 7th grade... the whole life policy is for 200k, and I have 300k of term insurance as well. 

My employer has been slowly putting money in my 401k over the past 5 years so that even though I have added nothing of my own (prefering to invest in my own resilience and suspecting higher tax rates in the future), there is now a good bit of money in there.  The plan is offered through T. Rowe Price.  Most of their mutual funds with the usual stock and bond funds are available as an option.  I have it all in the short term treasury money market.

There is also a self directed account available through State Street.  The list of fees suggests that various mutual funds and other funds (ETFs?) as well as stocks and bonds are available with this option.  Perhaps precious metals are available as well, although I haven't yet made the inquiry to find out.

I know I have a number of investment options for this 401k including taking the money out and paying a penalty.  What do you suggest  with an eye towards preserving this wealth for the future?

Do you anticipate near-term changes in Social Security benefits? Ignoring other considerations, would you advise someone who is eligible, but still employed, to begin taking benefits now to ensure starting under the current rule structure?

Since many city/state pensions could be in jeopardy in the years to come (pension shortfalls, city and states going bankrupt etc...) my question is, would you take a $60,000 a year pension or a lump sum of $400,000?  My fear is, if I choose to take the pension on a yearly basis, that $60,000 could be reduced (by government, city bankruptcy or inflation) or gone all together. If I take the lump sum, I can at least try to protect the $400,000 with PM's and other investments. I'm looking to retire in 2 years, but can retire earlier to get at the lump sum.

Chris has made several references to possible repatriation of assets stored outside of the US. This seems to me to warn against using GoldMoney as it only has vaults in UK, Switzerland and Hong Kong. I'm also wondering if this would have any relevance to holding CEF as its vault is in Canada, although I realize this is a (closed-end) mutual fund and shares are held in a brokerage most likely in the US.  Perhaps I'm misunderstanding something regarding this.

I raise this as an issue because most of my assets are (unfortunately) in IRAs in one form or another.

Attention Hard Assets Alliance: Please come up with an IRA option!

Information note for folks wanting to get to their IRA money now without penalty. One option without penalty (still have to declare withdrawals as income) is the SEPP approach: "Substantially Equal Periodic Payments" (not to be confused with SEP-IRA). You have to do a somewhat complicated calculation based on your age and amount of money in your IRA plus get an allowable interest rate from IRS websites to generate an amount of money you can take each year without a penalty being applied. It's somewhat complicated and you really need to make sure you do your homework. Bear in mind, once you start doing it you CANNOT change your mind without getting nailed on penalties. Unfortunately, with interest rates being as absurdly low as they are it dramatically reduces the amount of money you can take out because you get almost no benefit from compounding.

I can help you with her issues with diabeties, but not financially.  If you will go to google or what ever serach engine you use and type in holistic healing of diabeties it is curable and they will stop spending so much on health care. Actually you need to advise them on holistic health because they will spend not even half of what they do now. Cancer is curable aids, herpies every thing is. Go to g.edward.griffin a world with out cancer I beleive that is a great video to start your journey. I will make it simple. Holisitc means to cure a problem. You are going to the core and fixing it there so you releive all other sysptoms.  Your body will not and can not get sick if you give it what it needs. You will not get arthritus and other (age) related illnesses. Have a beautiful life, if you have questions email me at nelson.kala@yahoo.com

Sorry, I have to comment here, K.N.

When you say 'holistic' = 'to cure a problem', I think I have a different dictionary to you. Holistic means 'all aspects of a person's needs including: - psychological - physical - social - spiritual.'

I am a GP [Family Doctor] in the UK for 20 years.  Firstly, diabetes comes in 2 types: 1 + 2. Type 1 required insulin or you will die. Type 2's [formerly called Maturity onset] is treated with diet, exercise, wt loss, and failing that tablets, and failing that insulin. So when you say 'diabetes' is curable, what do you mean? For a Type 1 without insulin you will die of ketoacidosis. So as 'we' have become heavier as a population our rates of diabetes have markedly increased. You can 'cure' Type 2 [ie have normal glycaemia - sugar control] with diet, wt loss and exercise, with no medications. Interestingly in Cuba when they had their Peak Oil moment they on average lost about 20lbs in weight, and rates of diabetes dropped in step.

'Cancer is curable'? Question for you - which type? There are many curable cancers. If you are suggesting homeopathy or some other 'alternative' method to treat agressive cancers or Aids, then I would call you a Quack and Charlatan.

I  don't believe modern medicine has all the answers to health care. I also know modern medicine isn't always as holistic [in the true sense of the word] as it should be. That doesn't mean its a great advance over leeches, homeopathy, and other treatments with no evidence [is in the random, double blind, controlled trial] other than personal testimonials, 'it worked for me, so it will work for you'.

I'm not wanting to appear paternalistic or condescending, but please do not give medical advice to people unless you know what you are talking about.