With our national debt soon exceeding $26 trillion and climbing, as well as trillion-dollar stimulus packages to combat the coronavirus recession, there are tax risks retirees will face: one is Structural Risk- A tax deduction now equals taxation in retirement with your withdrawals. You will be in a higher tax bracket more than likely due to our huge looming debt crisis or with proposed tax changes under a President Biden.
Our debt as a percentage of GDP is high. We are on a trajectory that the size of our debt could exceed the size of the USA economy.
Absent dramatic cuts to entitlement programs, our debt will increase by $2 trillion per year, on average, over the next three decades. Moreover, the reason we’ve been able to sustain all this debt up until now is because of historically low-interest rates. If interest rates return to historically normal levels, we could see the cost of debt service triple or even quadruple. That’s just the cost of renting the money we’ve already spent, let alone all the other things that we’ve promised but can’t afford to pay. We are fast approaching a day where the interest on all that debt will crowd out all the other expenses in the budget.
Learn proactive steps and strategies to help shift your assets to a more favorable tax bucket, why the correct balance is imperative, and how to get closer to a zero tax bracket in retirement.
Join RFC ®, CEO Laura Stover as she hosts this informative webinar.
