November 6, 2009
Take a little trip over to one of the most shocking sites on the internet…..http://www.usadebtclock.org. This site provides up to date information regarding the nations current debt situation. This just goes to show you that you cannot spend your way out of a recession, and the more you try the more burden you put on tax payers (as I write this the debt per tax payer is $109,932). Do what you should have done years ago and get the government as far from your personal finances as possible. The best place to start is your 401k or IRA, these government created loop holes are just another way to tell you what you can and can’t do with your money. Why should the government be able to tell you how much you can put into savings for retirement? Why should the government tell you when you can start to take money out of your retirement savings? Sure I’ve heard the common excuse, “but if I could take my money out earlier I would spend it on unnecessary things!” Everybody that says that could use a little lesson on self-discipline and with a little help could better their situation by being in control of their assets.
April 3, 2009
Has the economy taken away years of gains from your retirement plan? Is there a better way?
I read a report in US News that over 2 TRILLION dollars have been lost within retirement plans. Most 401K’s and other retirement plans have seen better days to say the least. Not only do they tie up your money until you are 59 ½, but you or someone else needs to constantly manage the investments they are in and then hope that the markets perform.
Company matching has always been the lure to participating in the company retirement plan. Lately though, many companies have reduced and even eliminated the company match. If this has happened to you should you continue to contribute?
And what about taxes on retirement plans?
For years we’ve been under the assumption that we would put money in our retirement plans at a higher tax bracket than when we take it out, after all that is the only way to really come out ahead. However, that does not seem to be the case with most retirees.
I spoke with a 71 year old single woman the other day who said her income, at just under $40,000 per year plus social security, is putting her near a 33% tax bracket with federal and state. In addition 85% of her social security is taxed because of her income. The majority of the problem is caused because she has no deductions, no kids, no mortgage, no business, and most of her income is coming from retirement plans that have never been taxed. The result is she wishes she had never put money in a retirement plan and had paid the tax years ago at a lower tax bracket. Its cost her more to “postpone” the tax and pay it today than it would have to pay it years ago.
Maybe now is the time to change the way you are preparing for retirement. There are alternatives that may be more attractive than the traditional retirement plans created by the government. It’s funny, in a sick sort of way, that the government who created this massive and confusing tax system is the same government who created the “retirement plan” loopholes such as 401(k)’s and IRA’s. Should we trust them? At any time those who make the rules can change the rules.
Do you think taxes are going to go up? How are we going to make our way out of an 11 Trillion dollar national debt? Take a look at the National Debt Clock: http://www.brillig.com/debt_clock/ and it grows by $3.71 billion per day.
The bottom line is that if tax rates are on the rise, which seems inevitable, than why do we want to wait and postpone the tax to pay later at a higher tax rate? It doesn’t make much sense does it?
The question becomes, “what do I do?” What if I told you there was a better way that offers all the same tax advantages of government created retirement plans but takes the government out of the equation and puts YOU in control? Click here to view a video that explains this idea.