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Wednesday, January 01, 2014
Planning For Your Retirement Future: How To Prepare For the Continuation Of Poor Government Spending
Here are a few important points from the article you should know:
1. The nonpartisan Congressional Budget Office stated that the U.S. national debt is now 73% of gross domestic product(GDP), which is the highest in history apart from a period around World War II. The number is two times the percentage it had been at the end of 2007.
2. It warned that under current law, growing future deficits will push the debt to 100% of GDP 25 years from now. And under another scenario that envisions changes being made to some laws - including removing the so-called automatic budget cuts called the sequester - the debt would be even higher, at nearly 190%, by 2038.
3. Social Security, Medicare, and Medicaid alone are on a road to costing 14% of GDP by 2038. That represents $1 from every $7 made throughout the entire economy on solely those 3 items.
Ultimately, the CBO is telling our government that they need to stop fooling around and make significant changes to the so-called entitlement programs or they'll collapse our economy. Focusing on how dysfunctional our government is, I'm betting that they follow the same course they've followed for years, which is do nothing at all until it blows up in their face.
That is not great news for you, as our government is busy acting like irresponsible children. You should do be aware of, and plan for the following 3 things:
1. Assume the nextMedicare benefits will be reduced in the future. That means you need to have money in your retirement portfolio that you will want to earmark to help out with your future potential expenses.
2.Expect tax rates will increase. This will have a potentially large impact on your IRAs and 401ks. It's a good time to convert those IRAs and other retirement accounts to Roth IRAs and life insurance.
3. Expect inflation will become more significant in the future. One of our government's preferred ways to fix problems like this is to inflate the dollar while keeping benefits at a constant level, or inflating the benefits at a slower rate. You need to expect that inflation will play a more important role as we move forward.
When all has been said and done, it should come as no surprise to you that our government's spending habits will lead down a road of ruin, just like a household that continues to spend more than it brings in. I don't wish to be Mr. Doom and Gloom, but at the same time, dismissing the reality is pretty dumb. Make sure you're talking to your advisors to plan ahead for continued governmental fiscal irresponsibility , so you end up as well as you can with what will sure to be troubling times in the future.
By: Matt Golab, who is Chief Advisor of Aaron Matthews Financial Resources
Matt is an authority on creating innovative tax and investment solutions to help his clients succeed in their retirement years. The strategies Matt Golab has established and passed on through successful financial planning with hundreds of clients over the years has launched him into the national spotlight. Matt Golab continues to expand the geographic reach of his audience and desires to bring his expertise to a nationwide television audience. Matt emphatically states his mission, "I want to change the way Americans view their retirement. They can succeed (stay retired) regardless of what happens in the market". If you would like contact information for Matt Golab, please click right here. Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC. Registered Investment Advisor