Struggling with financial decisiongreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I've got a neighbor who has become convinced that he should cash out one of his retirement accounts (it's emphasis is in bank stocks and its current value is approx. $20k) and use the assets to purchase gold & silver for a dual purpose; diversify his portfolio, but also hedge against the possible collapse of "funny money" from the Federal Reserve Bank in the wake of Y2k. I need a few questions so I can help him make a smart decision. 1) Should he defer the 31% tax gouge to the IRS until next year? 2) Is there a best combination for the purchase of gold & silver; ie: coins, bullion, junk silver, numesmatics (sp?), or whatever, for maximizing the efficiency of the bulk or quantity involved in this amount of money? 3) Is his assumption valid that cashing in this amount from a retirement fund will signal a "flag" to some government agency, thereby putting himself under unwanted scrutiny by them, ie: "Ring, ring, Hello Mr. Smith, this is the F.B.I. We've noticed you've recently aquired a very large sum of cash and would like to have a chat with you." This concerns him because of the recent news about a bill which may now be law that all banks are snooping on their patrons for the Feds. in an attempt to catch drug deal monies. I await comments from those who have expertise in this sector of finance. Please don't bother soliciting me, as it's
-- Jondolar (email@example.com), February 03, 1999
My advice is for him to shift his assets into the cash portion of his account and sit tight. The 30%+ tax hit would be tough to take. I believe the Y2K effect on the economy will be catastrophic, but in a few years hence it will eventually recover. If he absolutely insists on early withdrawal, tell him to avoid junk silver and collectable coins and stick with different denominations of bullion coins.
-- Codejockey (firstname.lastname@example.org), February 03, 1999.
My advice is never give advice.
-- Blue Himalayan (email@example.com), February 03, 1999.
Before you cash out your IRA, you may wish to check out a pure gold and silver bullion holding company that is listed with symbol CEF on the American Stock Exchange. See www.centralfund.com
-- Philip Spicer (firstname.lastname@example.org), February 03, 1999.
New laws governing IRAs allow you to purchase gold and silver bullion coins to hold in your IRA. I think you have to purchase American Eagles coins, and the bad news is that you do not actually take possession of the coins themselves, but you can get a authorized agent to hold them for you (just like your bank or broker holds other IRA investments for you). I did an internet search about 6 months ago and found several places that would do this for you ( sorry - don't remember who they were). Of course if things get real bad then having the coins in some bank somewhere you can't get to isn't going to help that much either. Of course if things get really, really bad then there won't be an IRS to collect your taxes next year!
BigFurDog <- Decreasing his 401k deduction and buying Gold eagles!
-- BigFurDog (BigFurDog@snazzle.com), February 03, 1999.
Sorry folks if I failed to mention that my friend's fund is NOT an IRA, but a 403b. If that sheds new light on the question, I anticipate your advice eagerly, even if one you said, "My advice is, don't give advice." O.K., I can appreciate that comment, especially if you're not a financial advisor. (-:
-- Jondolar (email@example.com), February 03, 1999.
1) Yellow Pages
3) Tax/trust specialists
This is aquestion that truly represents the pinacle of teh "Free advice is worth....." saw.
You and he need to sit down with a GOOD tax/trust attorney for about two hours. YUP, It'll cost about 200 bucks (maybe a bit less, depends on the shyster) but plan on 200-250 and pay it with gratitude. This is a decision NOT to be done lightly>
-- Chuck, night driver (firstname.lastname@example.org), February 04, 1999.
Always TAKE DELIVERY with gold and silver!!! See Michael Hyatt's site, www.michaelhyatt.com and Swiss America's, www.buycoin.com for compelling reasons why. I would be very nervous having finances tied up somewhere, with only a piece of paper saying, "we're holding your xx (qty) Krugerands or yy $20 gold coins for you... trust us". Take delivery. Take delivery. Take delivery.
-- Bill (email@example.com), February 05, 1999.