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Missed Fortune – Owning Your Future Is Easier Than You Think

Posted on | October 7, 2012

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The Likely Impact of the Upcoming Election

A lot of Americans are looking ahead to the upcoming election and wondering what its likely impact will be on our economic future.

They’re wise to be thinking about such things. Consider, for instance, that when president Obama took office, if every taxpaying American were to write out a check for their proportionate share of the national debt, it would have amounted to about $92,000 per taxpayer.

Four years later, each of us would now owe roughly $160,000 due to the most unprecedented run up in the national debt that we’ve ever seen. If Obama is reelected, don’t be shocked if that amount soars to well over $200,000 per taxpayer in the next four years. There’s a very good chance that we will go into a double dip recession complete with continuing high unemployment.

Now if Romney is elected, his grasp of economics will likely result in a slow down of government spending, but even he will find it impossible to balance the federal budget immediately. The reason for this is that the IRS only collects about $2 trillion a year in tax revenues. But that amount will only cover the costs of interest on the national debt that’s over $16 trillion and the entitlement programs such as Social Security and Medicare.

The 2013 federal budget will still face a $1.3 trillion shortfall and every penny of that is money that will have to be borrowed.

If Obama is reelected and continues his policies, a double dip recession may result. If Romney is elected and slows government spending, a recovery may begin, but it will take years to see real improvement. The bottom line here is that no matter who is president, it is going to be very difficult to reverse the damage that has been done due to all of this debt.

Either way, you need to have a dream solution in place that will protect your money and your future regardless of who is leading the country. Whether they continue to go up or not, high taxes will continue to be a challenge for the foreseeable future.

The Dream Solution to Owning Your Future

To deal with the challenges of high taxes, it’s essential that you understand the difference between accumulating your retirement savings in a tax-free vs. a tax-deferred manner.

Though IRAs and 401(k)s are a preferred method of saving for the future for many Americans, they are far from the best way to answer the challenge of high rates of taxation. A lot of folks who have been faithfully putting their retirement money into these retirement vehicles are going to see Uncle Sam take a third of their savings in owed taxes.

This only leaves them with 66 percent of the nest egg that they thought they’d have to sustain them through their golden years, but there’s another force at work that will also affect their savings. It’s inflation, and even though it’s been artificially held at a lower rate these past few years, the days of 3% inflation are over.

With the amount of money that’s been printed over the past few years, the inflation rate must rise and as it does, every dollar you have saved loses a bit more of its purchasing power. No one wants to find that they’ve outlived their retirement savings. But those who fail to plan just might have a rude awakening.

But there are simple, proven strategies that allow you to protect your money from the effects of high taxes by accumulating your nest egg in a tax-free environment. Likewise, these same strategies allow your money to outpace the rate of inflation by linking your returns to those things that inflate so it actually helps rather than hurts you when inflation rises.

The upcoming election may affect the direction our country is headed economically, but a wise person will prepare for the worst while hoping the best by having their dream plan in place just in case.

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

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