Don’t you think it is better to have one bird in the hand, than two birds you can see in the bush? Of course! Then why do so many people defer their taxes by using 401(k) plans, or others like it, when the future and the markets are so uncertain? We all know the federal government is overspending. We all know the feds cannot possibly pay out the Social Security and Medicare benefits it has already
committed to. Do you think taxes just might go UP? Wouldn’t it be better to pay taxes now, and then never again?
Since the average person reaching age 65 has less than $60,000 of total assets, why would you consider to deferring taxes until the worst possible time in your life, when you can least afford to pay them?
Consider this: When you start drawing money from these tax-deferred plans it can easily force your Social Security benefits to be included for income tax purposes also, meaning you will pay at a higher tax bracket. So knowing this in advance, it’s time NOW to reconsider how you really want to fund retirement and how you want to pay your taxes. Don’t just go with what everyone else is doing, consider that there might be many other viable options for creating a predictable retirement you cannot outlive than throwing money into a 401(k). Contact me for these ideas: peter@moneymastery.com.
