When you take a look at your expenses, especially in retirement, taxes will be one of your top three expenses. For many its usually your top expense. We are not even talking about those with State income taxes, this just your Federal income tax.
The United States government has made trillions of dollars in promises for programs such as Social Security, Medicare, Entitlements, and interest on the National debt. In addition, current politicians and wannabe future presidents continue to pander and make promises that simply no one can afford to keep. There is only one way to deliver on these promises and that is to raise taxes. IT’S SIMPLE MATH. You literally have to almost more than double current tax rates just to keep our country solvent.
The only way the Government can pay its bills will be to go into your own hard owned money and charge you more for using it. Please understand that charging you more money, never means you get more value or quality. It usually means you pay them more to get less.
Unfortunately, many continue to gauge their wealth by how much taxes they pay and also continue to save the majority of their assets into tax-deferred accounts i.e. 401(k), 403(b), TSP and IRA’s. If (and when) tax rates go up, how much of that money do you think you’ll get to keep?
Remember, the amount of taxes you pay in your retirement are directly related to where you put your money during your years of saving. That is why it important to take advantage of the historically low tax rates we currently have and get rid of some (or maybe ALL) of your future taxes during retirement.
Tax sheltered accounts can be ticking tax time bombs. So be careful not to find yourself vulnerable to those Washington Zombies who want nothing more than to take your retirement income.