What Does The National Debt Have To Do With Your Retirement?
Well, if you’re like most Americans, you’ve been saving for retirement in accounts like 401(K)s and IRAs – planning to defer (postpone) the taxes until you take distributions in retirement. What happens if tax rates go higher? Did you know that tax rates are scheduled to increase?!
Take a moment and imagine you need to borrow some money. It could be for a house, a car, a boat, etc. The loan officer enthusiastically informs you that you've been approved for the loan, but with one condition. The condition is the bank will decide the interest rate and the terms after you borrow the money! Would you borrow the money? Of course not, but what does that have to do with your retirement accounts and your Social Security benefits.
Question: How much of your retirement savings have you voluntarily deposited into accounts that are subject to unknown future tax rates? Do you know how much tax revenue the Federal government will need in the future with a current National Debt in excess of $28 TRILLION with roughly 10,000 Baby Boomers going on Medicare and starting Social Security every day until the year 2040?
Question:How much of your retirement accounts are really yours?
Answer: Unfortunately, unless you can accurately predict what the tax rates will be when you make withdrawals, you simply don’t know how much of your retirement accounts or your Social Security benefits you'll really be able to keep!
Glenn W. Mosseller is president of Roadmap Financial Consulting, LLC. Glenn is also an Investment Advisor Representative with Horter Investment Management, LLC - Horter Investment Management, does not provide legal or tax advice.