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The Catastrophic Law That Mandates A Stock Market Crash

from GoldSilver (w/ Mike Maloney):

In this latest video, Mike Maloney uncovers the disaster-in-waiting that is the ERISA Act. It’s a law forcing the oldest of the baby boomer generation to start selling stocks today. This is the beginning of a mass exodus from the stock market.

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1 comment to The Catastrophic Law That Mandates A Stock Market Crash

  • JMiller

    There are some things that Mike Maloney says in the video, which comes originally from John Rubino, that are not correct. First one small clarification. You are not required to start taking distributions from your tax deferred accounts at age 70½ as Mike Maloney states. Your first required minimum distribution (RMD) from your IRA must be taken by April 1 of the year after you turn 70½. As far as 401(k) plans, normally you also must also start taking annual minimum distributions by April 1 of the year after you turn 70½, however in some cases if you continue to work past age 70½, the RMD for your current employer sponsored 401(k) will not start until you retire.

    Mike Maloney states that you are forced by law to take your tax deferred savings out over a 15 year period. That is not true. You are required to take out only the minimum distribution amount annually over your lifetime. Also Mike Maloney says that when you withdrawal money out of your IRA account that you are going to have to pay tax on it. Well that is not always the case. It all depends on how large the distribution amount is and if you have other income that could be large enough to make it taxable. My father has taken minimum distributions from his IRA for the last 6 years and has not owed any tax on the distributions since they were not very large amounts and my father’s only other potentially taxable income was from a pension. Both of these combined amounts were not enough to be taxed.

    As far as a stock market crash happening just because baby boomers are forced after age 70½ to take minimum distributions from their retirement accounts, it is NOT really mandated to happen. First, not all the money in tax deferred retirement accounts are in stocks. I think it is something like 70%. Second and most important, you are not forced to take the minimum distribution from the stock portion of your retirement accounts but can be taken from any asset you want within your retirement accounts such as from bonds or from money markets etc… So stocks are not guaranteed to be sold in large amounts by baby boomers just to fulfill their RMD unless the vast majority of them choose to take it from stocks and not from bonds or from a money market fund.

    So no, the ERISA Act, which requires an annual minimum distribution from your retirement accounts after you turn 70½, by itself does not guarantee a stock market crash as Mike Maloney believes.

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