need everyone's opinion

[Cu Penny Hoarder]

I have a small IRA account worth less than $5K. Should I cash it in, pay the tax/penalty, and buy silver, or leave it on the account? Interest rates are a laugh on what the IRA draws. The way I feel about the economy, I am almost afraid the money will go away in a bank failure....

YES. What your gut is telling you is correct... listen to it. 150-175 ounces of silver eagles sure beats $5000 sitting in an IRA account losing money.

I had a six figure 401k that I cashed in 2 years ago and another IRA that I cashed in last year. I paid the penalty and taxes (ie. the extortion). I took the funds and bought PMs with it. I'm quite happy I did it.

Do it now while you still can. The fiat party will come to an end sooner than most people think. When the SHTF, many people's retirement funds will be frozen and probably worthless. Taxes only go up, so you might as well do it asap.

[Cu Penny Hoarder]

Paying the penalty makes no sense. With an IRA you have plenty of options to buy stock, ETFs, mutual funds, etc. to take a 20% penalty up front to buy PMs makes no sense to me. In fact, you'd probably be better off buying PMs In a custodial IRA that will hold PMs on your behalf. Never pay penalties to withdraw early from an IRA unless you are seriously desperate. That's my opinion at least.

Bad advice. You must be a broker or fund manager. Reading this type of nonsense makes me gag.

No one can predict short term moves, but over the long haul, PMs are only going to go up. The appreciation of the PMs will make up for any penalty. Taxes only go up... better to pay now, than later.

Most importantly... If can't hold it, you don't own it. Custodial IRA?... gimmie a break.

[BamaJoe]

Paying the penalty makes no sense. With an IRA you have plenty of options to buy stock, ETFs, mutual funds, etc. to take a 20% penalty up front to buy PMs makes no sense to me. In fact, you'd probably be better off buying PMs In a custodial IRA that will hold PMs on your behalf. Never pay penalties to withdraw early from an IRA unless you are seriously desperate. That's my opinion at least.

Sorry man, but you are either very naive or I am one untrusting, paranoid SOB.

Worst case for me: I already made my penalty and taxes back and then some. I have the assets under MY control and what I do in the future with it is MY business - no more paper trails unless I want them for some strange reason.

Worst case for you: It all goes "poof" and you are left only holding pieces of paper.

I have to say I like my position better.

[barrytrot]

The key question here is obvious:

If you think that collapse is imminent then take your money out. If you don't then keep your money in.

Also BamaJoe: It's not being "naive" it is that not every thinks that collapse is imminent. You do not *know* it will happen just like other people do not *know* it will not happen.

I do *know* one thing: I'm enjoying this "pre-collapse" society a lot, so I hope it persists. Naturally in a collapse situation BamaJoe will not have the Internet to gloat with either

[BamaJoe]

The key question here is obvious:


I do *know* one thing: I'm enjoying this "pre-collapse" society a lot, so I hope it persists. Naturally in a collapse situation BamaJoe will not have the Internet to gloat with either

Damn, there goes my plans to pass the time while I'm barricaded in my home waiting for the zombies to die off.

[barrytrot]

Actually this might be good advice:

1- Before you take the IRA money out first liquidate other holdings where there isn't a penalty. Things like COLLECTABLES will have zero value in the coming storm.

2- Then ensure you have protection. See various threads on that.

3- Once that is handled then you can choose to liquidate or not. Doing so prior to the first 2 would be premature at the very least.

[Lemon Thrower]

i did this and here is how i looked at.

1. you pay income tax on what you take out, but you would have anyway. the amount in your IRA is before taxes. you still have to pay them when you are 59 or whenever. so the only consideration should be the 10% surtax.

2. its only a matter of time before rates go up, so taking a distribution now locks in today's tax rates. I don't know if yours will go up by 10%, but they are going to go up eventually. frankly i'm surprised they haven't gone up more already.

3. there is a definite advantage to the additioanl investment options outside of an IRA. Sure, if you jump through a lot of hoops you can hold bullion in an IRA, but do you really sleep at night doing that? The outperformance in bullion is likely to pay for that 10% in a very modest amount of time.

4. as a side benefit, you are immunized from future income tax increases and government regulation of IRAs.

5. in all likelihood, the government is not going to confiscate IRAs but they may double tax Roths', they may make withdrawals more difficult, and they may require a portion to be invested in govt bonds (somebody's got to buy them).

[penny pretty]

cash in that ira and put it in greek govt bonds! trust me lol

[barrytrot]

i did this and here is how i looked at.

1. you pay income tax on what you take out, but you would have anyway. the amount in your IRA is before taxes. you still have to pay them when you are 59 or whenever. so the only consideration should be the 10% surtax.

I'm not going to worry about the "collapse" arguments, that's a matter of opinion.

Here is information about the purely DOLLAR VALUE arguments:

Ok, let's assume that your current tax rate is 30% and at retirement it would be 60%. So taxes DOUBLE. That's very possible, I admit!

The penalty is 10% (I assume Lemon is correct.)

Let's say retirement is 20 years away.

For round numbers you have $100,000.

So if you cash out today you pay a 40% payment. $60,000 remaining.

Let's say bullion goes up by 15% every year.

After 20 years you have: $981,992.24

However, you still get taxed at 60% since that's the rate. (We are also throwing out tax evasion, of course. And I'm sure everyone agrees that the level of government intervention by then will make it much harder to avoid taxes.)

So your NET AFTER TAX: $428,796.89. (Remember the first 60,000 is "tax free" as you already paid taxes on it.)


If you instead kept the $100,000 in your IRA and invested in SIVR or one of the other funds that matches silver (or whichever bullion you prefer, of course). (We are throwing out the "government seizure" and "government collapse" arguments for now.)

So you earn 15% per year as well.

Net: $1,636,653.74

Now you pay taxes of 60%: $654,661.50 which is 53% more money than the early withdrawal scenario.

So Lemon Throw and others, unless you are thinking that IRA funds will disappear you are better off staying in the IRA from a monetary stand point.


NOTE: My assumption is that you hold the bullion and sell it in 20 years. If you buy-sell that means you pay taxes that year so your result could be smaller as a result of removal of principle prior to the 1.15x multiplier every year.

[shinnosuke]

GA-Silver,
Lots of good advice for you. I think everyone has your best interests at heart. That's one of the things that makes this place so great. In the end you pull the trigger though.

My two bits:
Have you ever seen the chart that shows the decline in the purchasing power of the dollar since the Federal Reserve was established? The dollar buys 97% less since 1913. Couple that with the fact that in the last couple of years, $4T has been added to the money supply. Sheer mathematics/logic make the dollar weaker. So you can leave you IRA alone and let it earn whatever...0.1%. Or, you could even get a few lucky stock tips and double your money to $10k next week. But if you wait several more years to pull the money out, what will you actually be able to buy with it? Market fundamentals say, "not much."

Dollar-from-1913_gif.jpg (61.54 KiB) Viewed 302 times

I don't talk much about my business on here, but we (I am just a small cog in the process) buy companies, mostly in Asia. Several big deals a year. The thing that bothers me is we use leverage (debt) to make our purchases. Businesses are chock full of debt. Consumers are maxed out with debt. Student loans are now more than credit card debt in the US. And sovereign debt is huge. No, not just huge, it's incomprehensible. All of this debt cannot be repaid. When (not if) the world defaults, the price of every commodity may crash and burn along with the loan portfolios. However, the value will be constant. PMs will be worth more than paper, especially digitized paper on some investment house's server.

Finally, if you're worried about the taxes and penalties, have a garage sale, get a paper route, deliver pizzas, rob liquor stores, donate plasma or anything else which will put some cash in your hands to make up for the loss.

[beauanderos]

Anyone who thinks digital numbers in any account will have any REAL buying power left in fifteen years... please stand up. Give me the tangible any day. You won't be able to buy silver or gold in fifteen years. I give it four years at most, before the dollar is complete toast. There are others who feel we have less time than that.

[barrytrot]

Anyone who thinks digital numbers in any account will have any REAL buying power left in fifteen years... please stand up. Give me the tangible any day. You won't be able to buy silver or gold in fifteen years. I give it four years at most, before the dollar is complete toast. There are others who feel we have less time than that.

I am standing.

And I'll take the bet of "won't be able to buy bullion in 15 years". I bet you will be able to.

[shinnosuke]

I give it four years at most,
before the dollar is complete toast.

You're a poet!

[beauanderos]

What I am referring to, when I state, in essence, that at a certain point in time you won't be able to buy silver and gold any longer, is that when the dollar crashes, and it's inevitable that it will... this will likely happen so rapidly that you won't have time to draw your millions out of your 401k's to purchase precious metals, and even if you do have access to the funds quickly, once the dollar is repudiated all bets are off. Silver and gold will become next to priceless, and only a fool would sell theirs to you at that point, for your worthless wads of fiat. And I would bet my life that the event I am describing happens WELL before fifteen more years pass. Life is about to change folks... unimaginably, it seems, for some of you. This isn't a joking matter, nor one to place wagers on, you either believe that our current lifestyles and debt loads are unsustainable, or... well... good luck.

[Sheikh_yer_Bu'Tay]

Anyone who thinks digital numbers in any account will have any REAL buying power left in fifteen years... please stand up. Give me the tangible any day. You won't be able to buy silver or gold in fifteen years. I give it four years at most, before the dollar is complete toast. There are others who feel we have less time than that.

I am standing.

And I'll take the bet of "won't be able to buy bullion in 15 years". I bet you will be able to.

I am counting on people being able to buy bullion in 15 years. That is about when I will be ready to sell! My plan is on selling at a much, much higher amount of money than what I bought them for! No not really selling for money. Buying things with them at a much better advantaged position.

I have a client who grew up in Bolivia. He tells me the story of one night they went to sleep and the next morning they awoke to find the government had dropped three zeros off their money in the night. For every 1,000 Bolivianos his father had in his retirement accounts, they were now equal to $1 Boliviano.

You don't think something like that would ever happen here? With this corrupt government? Oh, please! Stop! You are making me laugh so hard, my sides hurt!

If you are holding FRN's during something like this, you are going to get hurt. If you are holding assets (not just PM's) with intrinsic value when there is a monetary change-out, you stand to gain an incredible advantage.

[barrytrot]

What I am referring to, when I state, in essence, that at a certain point in time you won't be able to buy silver and gold any longer, is that when the dollar crashes, and it's inevitable that it will... this will likely happen so rapidly that you won't have time to draw your millions out of your 401k's to purchase precious metals, and even if you do have access to the funds quickly, once the dollar is repudiated all bets are off. Silver and gold will become next to priceless, and only a fool would sell theirs to you at that point, for your worthless wads of fiat. And I would bet my life that the event I am describing happens WELL before fifteen more years pass. Life is about to change folks... unimaginably, it seems, for some of you. This isn't a joking matter, nor one to place wagers on, you either believe that our current lifestyles and debt loads are unsustainable, or... well... good luck.

Unless you also think all corporations will fail and/or the government seizes assests without cause then you can still make more via stocks and ETFs. Because whatever "cash" is worth it will be revalued for "ownership" of all kinds.

[knibloe]

My wife has medical problems and even though I have great insc through work, the gov forced us to put her on medicare. Last week we got a letter in the mail that said NY will come after my land, 401K, joint accounts to recover what they have spent when she passes away.

This is just another way that they change the rules to suit their agenda.

We cashed out some small Roth IRA's a while ago. The holders changed the rules twice in 5 years on us and we got fed up. We did talk to the guy who does our taxes before we did it. You should too.

[JerrySpringer]

I have a small IRA account worth less than $5K. Should I cash it in, pay the tax/penalty, and buy silver, or leave it on the account? Interest rates are a laugh on what the IRA draws. The way I feel about the economy, I am almost afraid the money will go away in a bank failure....

If it is not a Roth type IRA, I'd say convert it to a Roth. Then use the Roth IRA to trade PSLV. Also, you can open a Roth IRA, fund it and withdraw that principal money tax-free, I believe, if you hold 5 years:

http://www.obliviousinvestor.com/roth-i ... wal-rules/


You can go short on silver too with the double-inverse exchange traded fund ZSL if you do not want to go long on silver.

If you think the whole financial system is going to implode and make your money go poof, then accepting the tax and penalties of taking your money out of the IRA is better than having it go the way of MF Global or Enron. Too bad nobody here has a copper-penny backed IRA fund they know of.

[Sheikh_yer_Bu'Tay]

What I am referring to, when I state, in essence, that at a certain point in time you won't be able to buy silver and gold any longer, is that when the dollar crashes, and it's inevitable that it will... this will likely happen so rapidly that you won't have time to draw your millions out of your 401k's to purchase precious metals, and even if you do have access to the funds quickly, once the dollar is repudiated all bets are off. Silver and gold will become next to priceless, and only a fool would sell theirs to you at that point, for your worthless wads of fiat. And I would bet my life that the event I am describing happens WELL before fifteen more years pass. Life is about to change folks... unimaginably, it seems, for some of you. This isn't a joking matter, nor one to place wagers on, you either believe that our current lifestyles and debt loads are unsustainable, or... well... good luck.

Unless you also think all corporations will fail and/or the government seizes assests without cause then you can still make more via stocks and ETFs. Because whatever "cash" is worth it will be revalued for "ownership" of all kinds.

I don't think that is what happened when GM went belly-up. The stock owners were screwed out of their equity while the unions were moved to the head of the line.

Remember the Chrysler Dealership owners. Several were singled out and stripped of their ownership equity. The judge in the Chrysler case actually committed fraud. The judge mis-quoted testimony to ensure these particular owners were shut out. The lawyers (Donifrio & Pigeon) who pointed out this fraud on appeal were sanctioned by the court a punitive amount of money to ensure they shut up.

[barrytrot]

I don't think that is what happened when GM went belly-up. The stock owners were screwed out of their equity while the unions were moved to the head of the line.

Remember the Chrysler Dealership owners. Several were singled out and stripped of their ownership equity. The judge in the Chrysler case actually committed fraud. The judge mis-quoted testimony to ensure these particular owners were shut out. The lawyers (Donifrio & Pigeon) who pointed out this fraud on appeal were sanctioned by the court a punitive amount of money to ensure they shut up.

Your example is the horrid American car dealers? Yipes. Only people that don't drive would have invested in GM Obviously that was a bear trap

Invest in good companies not terrible ones.

Also, my examples above were all assuming you think bullion is the best bet and therefore you are investing in ETFs. Actually I'm doing a lot of that myself lately.

[Sheikh_yer_Bu'Tay]

Your example is the horrid American car dealers? Yipes. Only people that don't drive would have invested in GM Obviously that was a bear trap

Invest in good companies not terrible ones.

Also, my examples above were all assuming you think bullion is the best bet and therefore you are investing in ETFs. Actually I'm doing a lot of that myself lately.

Barry, I commend your faith in our system and wish I still had it. I admire your investment savvy know-how.

The two examples I have given are not about good vs. bad stock picks. I am illustrating how the rule of law in this country has been compromised to political correctness. "Social justice" now trumps the rights of the individual American Citizen in a court of law, if the judge says so.

The same rule of law that you expect to protect your ownership equity in the best investment picks you can make should have been the rule of law within the two cases I have used as as examples. That is not what happened. Now, these two high profile cases are legal president for all other bankruptcies that follow them. Your ownership equity in stocks and other investments is no longer secure (IMHO).

[barrytrot]

Barry, I commend your faith in our system and wish I still had it. I admire your investment savvy know-how.

The two examples I have given are not about good vs. bad stock picks. I am illustrating how the rule of law in this country has been compromised to political correctness. "Social justice" now trumps the rights of the individual American Citizen in a court of law, if the judge says so.

The same rule of law that you expect to protect your ownership equity in the best investment picks you can make should have been the rule of law within the two cases I have used as as examples. That is not what happened. Now, these two high profile cases are legal president for all other bankruptcies that follow them. Your ownership equity in stocks and other investments is no longer secure (IMHO).

I agree with you about 95%. Injustice absolutely reigns

That said, go where the money is. That's where the politicians are. That's why GM and many other companies continue to exist despite impossible-to-do-worse-than choices in the last 20+ years.

Therefore knowing the system is corrupt you just invest where the corruption is likely to THRIVE.

Most larger companies have plenty of politicians in their back pocket so you can go back to "corrupt and good leadership" or 'corrupt and bad leadership" and bet on the "corrupt and good leadership" companies That's what I do :0

[GA-Silver]

Lots of great info here to chew on and digest. How much % in penalities and taxes do you think I'd have to pay if I cashed in my IRA? I've heard 33%. BTW, picked up a 1889 Morgan today for $20.....my new IRA!

[Slaphot]

You will have to pay a 10% penalty plus regular federal income tax. You will lose 25%, 35%, or more depending on your tax bracket. I recently got a new job and I rolled my 401K into a Traditional IRA, but I will not be contributing to my new 401K. I have also cashed out an old 401K from two jobs ago to pay off cc debt.

[Sheikh_yer_Bu'Tay]

Lots of great info here to chew on and digest. How much % in penalities and taxes do you think I'd have to pay if I cashed in my IRA? I've heard 33%. BTW, picked up a 1889 Morgan today for $20.....my new IRA!

Great buy on the 1889 Morgan!

Re-read knibloe's comment. Here is the part where you take the combined advise of a bunch of faceless know-it-all's.... and still go talk to your chosen tax pro, Bro! There may be a way to suffer the penalties and taxes and still come out looking good on your balance sheet at year end. Shop around!