Classic American cars… Corrupt Labor Unions… pension raids… and even the implosion of an iconic American company! Get ready to learn why IRA’s were created originally, and how that knowledge can help you avoid the IRA cataclysm known as the prohibited transaction.
Episode #6 of Self-Directed Investor Talk: https://SelfDirected.org/6
- In 1963, Studebaker - the once-thriving auto manufacturer - produced it's last car before going out of business
- Before they went out of business, Studebaker was forced by the United Auto Worker's Union to promise unrealistic pension benefits in lieu of higher pay, which Studebaker couldn't afford
- When Studebaker went out of business, they raided the corporate pension fund, leaving their former employees without the pensions they'd been promised.
- Studebaker was just one of many companies - nearly all of them highly unionized - that went out of business and raided their corporate pensions in order to pay their debts. But it was Studebaker that got the attention of Congress...
- In 1974, Congress passed a collection of laws called the Employee Retirement Income Security Act (ERISA) which, among other things, created the IRA
- The purpose of the IRA was simple: To empower Americans to save for retirement in a tax-advantaged way without connecting those savings to employers, or to the risk of employer failure
- The law didn't create "conventional" IRA's and "self-directed IRA's"... only the IRA. The distinction between conventional and self-directed is entirely a function of the policies of each individual IRA custodian
Full story at https://SelfDirected.org/6
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