Problems with the Tax Qualified Retirement Plan


#1. Taxes are going to go up. They’ve gone up since 1913. #2. You’d rather pay taxes on the seed vs the harvest. #3. A dollar is always worth more today than in the future. The tax qualified plan, the traditional qualified retirement plans violate those three basic truths. When government creates a problem (onerous taxation) and then turns around and grants you an exception to a problem they created (Any tax qualified plan). Aren’t you just a little bit suspicious you’re being manipulated? Understand that all of these tax qualified plans are a function of the IRS code. Now, the first 9 pages described income. The next 1100 Pages are exceptions to the code. You see the whole object here is to control your life. With a qualified retirement plan, the traditional qualified retirement plan, if I go to work when I’m 20 years old and I start participating in a qualified plan. Maybe I’m going to get a match from the employer maybe not. I’ve effectively locked up my money for the next 40 years. Because I can’t access that capital until I’m 59 1/2. If I do access that capital I’m going to pay an egregious penalty. Once I reach 59 1/2 I enter into a magical 11-year period That I can have all the access I want to my capital. I can take out as much or as little as I want, But when I turned 70 1/2 I have to take out a required minimum distribution. Uncle Sam wants his share. If I don’t take out my required minimum distribution I could be penalizing, and will be, up to 50% of what I should have taken but didn’t. Now, if I’m going to live 20 more years we’re effectively in a penalty phase over the life of that plan 85% of the time. You got to wonder who is that plan designed for? Me? My family? No, it’s designed for Uncle Sam

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