Unless you have been living under a rock recently, there are some serious changes coming for Medicare and Social Security. As of 2018, Medicare and Social Security (both disability and regular) will begin eating into their reserves. The Medicare hospital-insurance fund is projected to be depleted by 2026, 3 years earlier than anticipated. Don’t worry, you won’t get an immediate cut, but in 2039 78% and in 2092 85% will be paid out. As for Social Security, expect your benefits to be reduced somewhere between 2032 and 2034.
Why worry about this? Because unless Washington raises taxes, The United States of America will default on most, if not all, of its obligations. You may ask yourself, “How can that be? We are the USA!” It comes down to something very simple that you learned in elementary school and through college, MATH!
If you have a moment, google David M. Walker, former Comptroller General of the Federal Government. After he left office, he started appearing on radio and tv with a very grim message, “Tax rates would have to double to keep our country solvent.” The Congressional Budget Office reported that if tax rates don’t rise dramatically by 2023, the USA will start defaulting on the national debt. Can you even imagine a tax rate of 50%, 80%, or even 90%? It has happened before, just look at history, and it will happen again.
As dark as it may seem, you can do something to help yourself. If you have 401k, IRAs, or any other qualified plan, start paying the taxes on it now! Don’t walk, run to paying the taxes now. We are at the lowest tax rates in the history of our country. The question is, what products or wrappers are going to help? We all know that Roth IRAs are income tax free on the principal and the interest gained, so that’s a good start. There are other products and investments out there that give this kind of tax advantage-you just need to know where to look. A true 0% income tax bracket would even make sure that when you draw on your Social Security, none of it is taxed either. That’s right, if you make too much money in retirement, up to 85% of your social security income can be taxed.
At the end of the day, this can be a daunting task, and you need to find someone who specializes in helping people get to the 0% tax bracket. To have the lifestyle you dream of, after 30 years of working, you owe it to yourself to make a change. Visit our website at www.arseneauadvisory.com or call us at (470) 839-9001 to schedule your complimentary no obligation visit.