Content: Page 66, Becoming Your Own Banker ©
First of all, I think we must accept the fact that all governments lie to you, and especially your own. How many times has the Internal Revenue Code been changed? As a foundation for this lesson, I suggest that you go back and re-read Part II of this course. It appears to me that all this emphasis on retirement is a Socialist idea that has as its basis the feeling that “we have to get the older folks out of the work force to make room for the younger generation because there aren’t enough jobs to go around.” My word! What drivel! Have they no understanding of creativity? Just think of something like the desktop and laptop computer – there was no such thing twenty years ago.
Yet, this idea of retirement is so prevalent today. Over thirty years ago, my mentor, Leonard Read penned these words: “Most Corporations, educational and religious institutions, chambers of commerce, trade associations, and other organizations compel retirement at 65; many make it attractive to retire at 60; and we hear more and more of retiring at 55. The sole criterion is the number of moons that have come and gone; whether the budding process is dead, or at its very peak, is not even considered. As a consequence of this indiscriminate, rule-of-thumb procedure, many of the nation’s best men are put out to pasture.” What mental paralysis!
In 1976 – the so-called Bi-Centennial Year – I penned these words on my birthday and put them into my personal file for posterity. Social Security will fall, as have all socialist programs since time began. Before it falls, they will attempt to prop it up. The source of funds that they will use is the reserves of private pension plans and other government sanctioned schemes.
Most folks laughed at me, but it was less than a year before the first “trial balloon” went up suggesting that it was a possibility. Of course, it was shot down right away but there has been an accelerating realization that this is going to happen in the not too distant future. Regardless of the facts many will be caught by surprise. Witness the “surprise” by most people, particularly in government circles, that the Soviet Union “collapsed so quickly.” That is not so! It was doomed to failure from the start because it was operating from a faulty premise that government knows how to order the lives of people better than do the people themselves. Social Security will fall for the same reason – a faulty premise!
To explain to skeptics, all the IRS has to do is say, “Look, Doctor, that $40,000 you put into your retirement plan last year was not your money – and you know it! Half of it was taxes that you were going to have to pay had we not granted you this privilege. The other half, we admit, was your money. All we really did was defer your taxation until your retirement time. We were going to get it all back at that time, anyway.
Social Security was created for the common good of our country. So were pension plans for folks like you. It is all the ‘same piece of cloth,’ don’t you see? Now, you have done a great job of putting funds into your retirement plan but Social Security is in trouble. We need ‘our half’ of your contributions now to salvage the system for the common good.” There is not a thing the Doctor can do about it because whatever the IRS created, it can, and will confiscate when an emergency is declared. The will steal your money!!
Everything that enables the Congress to do this is already in place. If you need proof of this, just consider what happened after September 11, 2001. An emergency was declared and just look at how our world has changed since that infamous date. We have unbelievable restrictions and intrusions in our lives and I don’t know of anyone who really feels any safer. Can you imaging a greater emergency than the collapse of Social Security? There is no way to “fix” a faulty premise. It should be abandoned.
If you need further proof, review the Executive Order issued April 5, 1933 signed by Franklin D. Roosevelt where they confiscated Gold Coin, Gold Bullion and Gold certificates. All they had to do was declare an emergency. You say, “But, can’t they confiscate life insurance cash values?” My response, “Life insurance is not a creature of the government. It has been around for 200 years. The IRS has only been around since 1913 and the tax-qualified plans are their creatures. What’s more, governments always take the course of least resistance and it will be easy for them to get to this money.”
So, I’d like to de-emphasize the concept of retirement and emphasize the term “passive income” used by Robert Kiyoski, author of Rich Dad, Poor Dad. This is income that is coming to you without your doing anything for it. In Part V of this course you will see the ultimate in passive income. It is dividends from whole-life insurance with a mutual company.