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Missed Fortune – The Clock Is Running-Are You Prepared?

Posted on | April 10, 2011

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The Two Year Window You Cannot Miss

The 112th Congress is finally in gear but they have major issues to tackle.

We have a roughly 2 year window before our tax rates go even higher.

What should you be doing during this next two years?

The debt we’ve incurred in just the last 2 years increased by $3.5 trillion. In the last 4 years, the national debt has increased from $9 trillion to $14 trillion. That’s nearly half much debt as our nation incurred in the last 100 years.

The Congressional Budget Office last year said that by mid century average middle income Americans will be paying 50 to 60 percent of their income to taxes. That’s thanks to the spending problem that continues to grow.

You need strategies and solutions so that when higher tax rates come you’re protected.

Even at current rates you’ll pay back 1/3 of what you have in your retirement funds. We must take advantage of this 2 year window.

One thing that didn’t happen this year was that the income tax thresholds didn’t increase like they do nearly every year to allow for cost of living.

For a married couple, on every dollar you make over $68,000 you’ll pay 25% in federal income tax and in 41 out of 50 states you’ll get to pay state income tax as well.

If you’re single, every dollar over $34,000 you’ll pay 25% federal tax plus state income tax. When you start withdrawing money from your 401(k) or IRA you’ll be paying a third of what you withdraw in taxes.

You need to protect yourself because we’re headed to higher taxes.

Stay Tax Free Now & In the Future

Get your money out of your IRA or 401(k) with a strategic rollout to get your money into something that will be tax free from this day forward.

You cannot delay because the rollout process can take a few years to accomplish. Section 101(a) of the Internal Revenue Code has been around far longer than section 401(k) or the section that allows IRAs or 403(b)s or 457s.

Even tax professionals like CPAs and tax attorneys often don’t know about this grandfathered section of the tax code and how to use it correctly.

Get money into vehicles that will be tax free and inflation proof. Inflation is coming, don’t kid yourself.

Indexing to inflation means you tie your investment to things that inflate and you don’t lose a dime in inflationary times.

Otherwise inflation cuts the purchasing power of your dollar every 15 years at just 5% inflation.

You need to have a strategy that allows your money to grow tax free. One that allows you to access your money tax free. One that when you die, transfers your money tax free.

Many Americans with IRAs and 401(k)s are trying desperately to make up what they lost four years ago. During the “lost decade” people missed out on making a fortune.

Folks who used indexing strategies didn’t suffer when the S&P 500 or the Dow Jones fell.

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*Life insurance policies are not investments and, accordingly, should not be purchased as an investment

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