Posted on | June 12, 2011
Like a Ship Taking On Water
Our national ship is taking on a lot of water in the form of debt. It’s easy to see the waterline is rising. This is due to misguided management in the financial industry coupled with addictive government deficit spending.
National and corporate leaders have done what every Ponzi scheme architect has done by bringing in new money to cover for old promises.
Take Social Security for example. If this program didn’t bring in new money to cover current recipients income it would quickly go bankrupt.
Baby boomers are starting to retire and the workforce is shrinking. When Social Security was started, there were 15 workers contributing for every one recipient. But those numbers have shifted to where we now have 3 or 4 workers for every recipient of Social Security.
It won’t be long before we’re down to 2 workers for every recipient and government will have to take more and more of our income to pay out what it has promised.
Social Security debt is at $62 trillion. To get the sense of how much money that is, $1 trillion dollar bills lined up end to end would reach from here to the moon and back 200 times.
This means that, after adjusting for inflation, the federal government has obligated itself to paying more than $100 trillion that it has not collected from by withholding from American workers paychecks.
The government doesn’t have the money to cover its expenses and the only way it can get it is by withdrawing money from our paychecks each month or by printing more money–causing inflation.
The bottom line is we’re going to have more and more people in the wagon and fewer and fewer workers pulling.
The day of reckoning could come as soon as the next 10-15 years. Or it could be partially happening now.
The government has already been collecting less in Social Security than it has been paying from October of 2009 to January of 2011.
If solvency is defined as barely bringing in enough to cover what is paid out, we’re in big trouble.
More Trouble On the Horizon
Medicare is six time larger in terms of unfunded obligations according to former U.S. Accountability Office comptroller David Walker.
With current figures it would require $700,000 from every full time working individual in America in order to cover the huge social security and medicare liability.
The U.S. national debt is over $14.3 trillion and the interest alone accrues at just under 41 billion dollars an hour.
In an article outlining 3 ways your Social Security payments are already being cut by Alicia Manelle says, “Lost in the debate is the fact that even under current law, Social Security will provide less retirement income relative to previous earnings than it does today.”
Social Security may no longer be the mainstay of the retirement system for many people.
There are 3 main issues that are fast approaching.
1. The retirement age is going to be extended from 65 to 67 depending upon when you turn 65.
2. The increase in Medicare premiums from 5% to 12%.
3. The taxation of Social Security benefits.
These dangers should be clear to you by now.
Taxes are going to go up. Inflation will decrease the purchasing power of the dollar. And market volatility will continue for the foreseeable future.
Those who have learned and applied Missed Fortune Strategies have learned how to protect their serious retirement money from rising taxes, inflation and market uncertainty.
They can sleep soundly at night knowing that their money is accumulating tax free, not tax deferred. Their returns are linked to those things that inflate so inflation becomes a help and not a hindrance.
They’ve repositioned their serious cash to participate in any upside the market may experience without risking their principal in the market.
*Life insurance policies are not investments and, accordingly, should not be purchased as an investment