I found something bizarre the other day when looking over Senator Joseph Biden's financial disclosure report.
On page 5, Biden listed six personal accounts he owned which had a very unique feature:
They don’t need to be reported to the IRS.
That means that, unlike a 401(k) or IRA, Senator Biden doesn’t have to pay taxes on this money—now or later—and also doesn’t have to pay taxes on any income generated in these accounts.
Other Senators have also recently hidden some of their money in this tax-free account.
Virginia Senator Mark Warner, for example, the second richest member of Congress, currently stores over $1.5 million here.
Maryland Senator John Delaney also has an account.
As does Arizona Senator John McCain. McCain, in fact, funded part of his 2008 Presidential campaign using his $1 million account (unlike traditional retirement plans, money can be accessed in this account anytime without penalty).
What is going on? Are all these senators hiding their money ahead of a possible Obama-led raid on retirement accounts?
It's possible," says income expert Tom Dyson, who heads up Common Sense Publishing, an investment research firm based out of Florida. But it's not the only reason.
"When you look at this account, it's no secret why many of the elite are storing money here. It's probably the safest and most private retirement account in America right now."
According to Dyson, while equities dropped almost in half during the crash years of 2008-2009, only 1% of the investments held in these accounts were “non-performing.”
Another mark of safety: Eight companies Dyson studied that provide these accounts have now paid out for 121 consecutive years.
That's perhaps why some of the richest people in the world have long been rumored to have used this account to grow their fortunes.
The Rothschilds. Rockefellers. Kennedys.
President Franklin Roosevelt, for example, held $562,142 inside his account, a figure that reaches over $7 million in today's dollars.
It's "become a tax shelter for the rich," reports the Wall Street Journal.
In addition to being free from taxes (when used the right way), money held in this account is not subject to estate taxes and is also free from creditors in many states.
A Loophole Soon to be Closed?
According to Dyson, almost anyone in America can open an account. But the window to take advantage of this opportunity may be closing.
"There have been at least 13 serious attempts to repeal the tax advantages of this account," says Dyson. "That's why some people I've talked to have gone so far as to open up 5 or 6 separate accounts. They want to get locked into these advantages."
In order to help members of the general public access this information, Mr. Dyson has put together his findings in a special report that readers can access for free [click here to learn more about how to access this report].