Today’s financial services industry offers an array of many different types of retirement plans–401k, 403b, IRA, KEOGH, MyRA, Roth IRA, etc.–and in recent news, there has been talk about possibly adding another plan to the long list: the GRA.
Before we dive into the details of this new plan, let’s talk about today’s retirement crisis and what we can do to protect ourselves in order to truly understand the impact this plan could have on the way we plan for retirement.
Back in the early 1900’s, people retired with pension plans that provided them with guaranteed income for life. Those pension plans were invested in Life Insurance and Annuities.
Guess what, they worked!
However, in the 1930’s our government determined people were not saving enough so they introduced and mandated Social Security.
Then in the early 1970’s, our government (again) stepped in, in partnership with Wall Street lobbyists and created 401ks and IRAs.
Today, 40 years since the introduction of 401ks and IRAs, our government, yet again, feels the need to step in and save us from the very disaster they themselves created.
Now the government is contemplating mandating your investment(s) into a GRA (Guaranteed Retirement Account) in which they will control and the Social Security Administration will be responsible for administering payments.
Could your 401k become obsolete and be traded in for a GRA?
The answer at this point is unclear. However, a recent CBSnews.com article explains that “the funds would be automatically deducted from pay, pooled together and invested in long-term, low-fee vehicles that could generate better returns and fewer losses than 401k plans.” They don’t tell us where the funds will be invested, and they use the phrase: “could generate better returns.”
Do we really want to allow our government to control our financial futures?
Think it’s time to rethink your retirement planning? Then request your free, no-obligation analysis to discover a better alternative that is tax advantaged, guaranteed, predictable, safe, liquid, AND under your control!
(Contributed by: Joe Overfield, President, Bank On Yourself Authorized Adivsor)