Social
Security is in a bad shape. That, my friend, is basically what the Social
Security Board of Trustees told us about the financial health of the program in their
2012 annual report. The trust funds
will run out of money in 2033, three years sooner than predicted just a year
ago. Meanwhile the Disability portion will be exhausted much sooner in 2016 –
that’s two years earlier than we had thought this time last year.
Obviously
this is not good news but yeah, yeah, yeah – we’ve been hearing this for
years yet our checks keep  coming, so what’s the big deal now? In my humble
opinion, the majority of Americans with yet-to-be-taxed 401(k)s and IRAs are
literally sitting next to a ticking tax bomb – and don’t even realize it. Of
course I’ll explain, but first pay very, very close attention to the reaction
of the Commissioner of Social Security, Michael J. Astrue (who’s one of the
Trustees who issued this report):
"This
year’s Trustees Report contains troubling, but not unexpected, projections
about Social Security’s finances. It once again emphasizes that Congress needs
to act to ensure the long-term solvency of this important program, and needs to
act within four years to avoid automatic cuts to people receiving disability
benefits."
Most
pundits make this complex but I think it’s very simple. Social Security is
going broke because Congress has already spent our contributions, and with an
estimated 10,000 baby boomers per DAY reaching age 65 for the next 18 years or
so, things are getting pretty tight at a very fast pace. So I agree with
the Commissioner’s comments that “Congress needs to act.”
But exactly how? Pay back the IOU’s, get more revenue into the system, or tell
American seniors to take a hike? Wouldn’t you agree with me that it would take
a pretty dumb Congress to try to stick it to seniors? So, in a nutshell, we
need to put more money into the system, right? Here’s the thing, though, the
ONLY way Congress can get more money is by increasing taxes.
I hate to be the bearer
of bad news, but there’s only one way for me to be truthful here: Expect
massive tax hikes! Would a tax hike ruin your retirement? That’s a question I
think you need to explore seriously if you own any kind of tax-qualified plan.
I know that most so-called financial advisors/experts think it’s okay to just
be passive and go with the flow because, after all, you’re probably not one of
those wealthy people the tax increases will affect. But don’t you think
that being proactive by positioning your retirement assets in a way that
protects them from future tax hikes under IRS rules is much smarter than
betting that Congress is only going to stick it to “the rich folks”?
If
you’d like to discover the easiest way to protect YOUR retirement funds from
future tax increases, contact an experienced professional at Laser Financial Group TODAY to set up your complimentary, no-obligation consultation.
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