![]() ![]() Where do you think the money to pay for that will come from? By 2045, 140 million – twice as many – Baby Boomers and Gen X-ers will be over 65 and requiring Social Security and Medicare. Today there are 62 million Americans using Social Security and Medicare. For example, let’s look at the numbers impacting Social Security and Medicare. Simply put, the government is going to need more money in years to come for several reasons. The reality is that you are probably sitting on a tax time bomb. And your retirement could last 20-30 years or more. However, most people, including most financial experts, believe tax rates must head higher, not lower, over the long term. If tax rates are lower in the future, you’ll come out ahead. It’s the same fraction of your money that is left to you.” “It doesn’t make any difference whether the taxes are taken away from you at the beginning (before you put the money in a savings vehicle) or at the end (tax-deferred). According to the Society of Actuaries, if tax rates remain the same… ![]() After all, doesn’t that mean your entire contribution can go to work for you immediately? Unfortunately, like many assumptions about personal finance, this simply isn’t true. He’ll tell you what your tax liability is at the time your taxes are due.Ĭonventional wisdom says you’ll come out ahead by deferring taxes. In our immediate-gratification society, deferring your taxes by funding your 401(k) sounds so good, doesn’t it?īut when the tax man eventually comes calling, he won’t ask you to pay what your tax liability would have been if you’d been paying taxes all along. Want proof? Here Are Six Reasons Why 401(k)s Are a Scam… Reason #1: The 401(k) Tax-Deferral Scam ![]() But as a financial investigator who’s exposed the truth about the conventional financial wisdom, I’m used to that, so here goes…Ĥ01(k)s are a scam. I’m going to make a very bold statement that’s sure to get me some nasty blowback. Suze Orman & Dave Ramsey: Let’s debate!.Explore the benefits of Bank On Yourself.
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