Episode 2: The Fiscal Health of Our Country
So today’s show is all about the fiscal health of our country. Now, it may not seem like this should be such an important topic. When we talk about retirement planning, why are we going to cover finance, debt, and those type of things? You will see as we go through this show why it is so important that we cover this topic? Because as you look forward to your retirement, it is going to be something that will affect your retirement years greatly.
The first question I have for you is do you expect taxes to be higher or lower in the future? I go across the country talking about this topic. In fact, I do a number of large webinars for CPA groups. And every time I do, we talk about this question and the main answer that we get back is the taxes will be higher. In fact, many people believe that in short of a period of time, as 10 years from now, taxes could be substantially higher, maybe even double what they are now. So if this is the case, if this is what we’re facing, are your retirement assets invested in the right place?
One of the other things that we’ve learned as we go across the country is that 95% of people have their retirement assets placed in tax deferred accounts. Now what are these tax deferred accounts? These are your IRA, your traditional IRA. You’re 401 K defined benefit plans, these are plans that you’re putting together to allow you to get tax savings now but then have to pay the taxes at some future time. Now one of the important things that you need to understand about tax deferred investments is that is what they are. Many people, especially CPAs, EAs, other professionals. Will try to promote these to you as a tax deduction. Similar to maybe a home mortgage expense or property taxes, where you can take these off your tax return, reduce the amount of tax you owe and never have a future liability or the deductions that you taken. Well, retirement plans were not set up the same way. If you get a deduction on your tax return now for an IRA contribution, all you’re doing is deferring that tax to a future period of time…
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