As we transition into 2019, we look at a number of things going on in the economy and investments. There is volatility everywhere and you can see that in the fluctuation in the market. On the government side, Timothy critiques what it is doing through an article titled “Congress Quietly Formed a Committee to Bail Out 200 Pension Funds.” He gets down to how the government is robbing the people through big taxes as well as how they work with banks. Going deeper, he talks about the problem with politicians and what he calls the Rich Man’s Roth.
Listen to the podcast here:
Big Taxes And Social Security: The Problem With The Government
The year 2018 seems weird. I remember being young thinking that 30 is old as a kid and time does not slow down. There were a lot of things going on in the economy and a lot of things going on with investments. For the most part on what I do for a living, I swim upstream, number one. Number two, I’m the only guy around here. I only deal with a couple of different investment strategies and I have my own money in all three. I don’t fool with anything else. I don’t deal with anything else. I call that skin in the game, eating, home cooking and I’m not married to Wall Street. The volatility that we have seen the market show is insanity. If you are currently contributing to your 401(k) at work and you are contributing more than the company match, it will be great to have a conversation with you. I can show you a different place to put over the match. People ask my opinion all the time. You should contribute the minimum amount of your money to receive the company match. If you’re doing more than that and you’re not missing out of your paycheck, call me and let me show you where I’m putting my money and what the ultra-wealthy are doing. I’m not ultra-wealthy and I’m not even wealthy but to scale it down to what you can put in.
Everything that I do revolves around tax code, certain parts and certain sections of the tax code. Section 263(c), 59(e), section 611, 613, section 613(c)(6) and section 469(c)(3). That’s all about receiving the doctrines and December 31, 2018 is your last day to make an investment into an oil and gas rail project to receive the deduction for 2018. Whatever the amount that you contribute, there’s potential to receive that same amount as a deduction for 2018 taxes. There’s nothing else out there like this investment. Yes, there’s absolute risk in oil and gas. Number one, they’re going to hit all. Number two, the price of oil per barrel. Number three, how many barrels being pumped per day. That is an investment that I love. I love oil and gas. I love the monthly income. I love the tax deductions that I get for the year that I’ll make the investment for the contribution. It’s great. It’s a straight-line deduction but it affects your bottom line taxable income on what you pay Uncle Sam.
“Congress Quietly Formed A Committee To Bail Out 200 Pension Funds”
I talk about that all the time and I talk about not overfunding your 401(k). There are several things going on. To me, the world economy is not very stable and you can see that in the fluctuation in the market. I don’t believe them. I would not want my money and I don’t have my money somewhere where it’s fluctuating like it is. The volatility is the true definition of volatility. I’d rather stick my money somewhere and get a steady 8.5% or 9% return every year and is paid monthly. Can you live with that? Can you live with taking money out ten or eleven years down the road and when you take the money out, it’s not reportable to the government because of the way it’s structured in this asset class and no, it’s not an annuity? Here’s an article that I want to read titled Congress Quietly Formed a Committee to Bail Out 200 Pension Funds. I’m very upset with our Congress. I have little to zero faith in elected federal government officials. A lot of them go up there with the right mindset and then they get in a swamp and they get corrupted. The way that the government taxes us and they tax Social Security, to me, it’s borderline theft. As a society, we are overtaxed. I believe in a smaller government and the radical left.
I don’t want to get into a political debate here, but the radical left wants a big government. I don’t even like being associated with the Republicans because I think there’s one party. I truly firmly believe there’s one party in DC and it’s just the elected. Once they get up there, they want to take sides on a couple of things to make us think there are sides but there’s not. Here’s an article, Congress Quietly Formed a Committee to Bail Out 200 Pension Funds. This is from the Sovereign Man website, “The US pension system has gotten so bad, Congress is planning for its failure. As the government was working on the recent new budget deal and subsequent boost in government spending, Congress quietly snuck in a provision that forms a committee which would use federal funds to bail out as many as 200 multiemployer pension plans where employers and labor unions jointly provide retirement benefits to employees.
As is often the case, this rescue plane is too little too late. The US pension system is beyond repair. If you’re depending on pension income to carry you through retirement, it’s time to reconsider a plan B. Before explaining how dire the situation is, let’s take a step back. Pensions are simply giant pools of capital used to pay out retirement benefits to workers. Typically, employers and employees contribute a percentage of the employee’s salary to a pension throughout his or her career. Then upon retirement, the pension is supposed to pay a fixed monthly amount to the retiree. There are both government and corporate pension plans. Boston College estimates the nation’s 1,400 multiemployer plans corporate are facing a $533 billion shortfall. Around one-quarter of those are in the red zone, meaning they’ll likely go broke in the next decade or so. The Congress’ committee, assuming it works, wouldn’t even rescue the red zone plans much less remaining 1,200. It doesn’t even begin to address the real problem. The $7 trillion funding gap faced by the government’s own pensions.”There's one party in DC and it's just the elected. Click To Tweet
It’s crazy. I’m a laid-back person for the most part except when I get excited about topics when someone’s trying to screw me over. The government tries to screw me over every time I have to get money on my Social Security. The government is giving me the middle finger when I have to pay into Social Security because I don’t want to pay into the system. I saw what my parents did. I saw how the Social Security system screwed my parents. They totally stole money from Hollis and June Day. My parents, Hollis and June, just like you driving around Baton Rouge, you are probably a retired working class or tax-paying citizens of this country. My parents were hardworking. My mind went back to nursing school when I was a kid and became a registered nurse. My mom had a high school diploma and went back and took her prerequisite at LSU and then went to Baton Rouge General School of Nursing. My dad owned a tire business that he eventually had to shut down with my uncle and went to work for a tire distributor. My parents saw hills and valleys as we all do in their life, personal, financial and all that. We all go through that. During this whole time, my mom and dad are contributing to Social Security just as you are. You may have been receiving Social Security benefits for ten to twenty years and that’s great.
My parents contribute to Social Security every paycheck. My mother passed away at 54 years old of ovarian cancer. She applied for Social Security disability and died four months receiving a Social Security disability check. My mom could have had some of that money that the government forced her to put into the Social Security System for all those years. She maybe could have taken a trip because things got tight for her financial there at the end. She could take a trip maybe six months before she died but she didn’t because the government’s screws us every paycheck and we have to put into Social Security. We don’t want to. I don’t want to. The government is terrible at managing money. Why should I have to pay into a government who can’t even manage its own books and have to pay into every system? I’m paying to the system every paycheck. The Congress is trying to bail out these other pension funds when they have their own pension funds. Social Security is going bankrupt. It’s crazy how we aren’t rioting in the streets right and overthrowing ships of tea.
Banks And Congress
I don’t want anybody messing with my money and the fact that the Congress is stepping in, they bailed out the banks. Let me tell you what these banks are doing. They’re doing the same stinking thing they did back in ‘07, ‘08. It was years before that, but it caught up to ‘07, ‘08. You can get a loan for a house and finance 100% of it and put nothing down and have crappy credit. Do you know why they’re doing the same thing? Because they didn’t learn the lesson. The banks didn’t learn the lesson because they got bailed out. If you have children or relatives, as I have seen people with money problems or drug problems, if they’re bailed out, they don’t learn the lesson. The big banks didn’t learn a lesson so they’re doing the same thing.
Back to the article, “Congress is stepping in because the Pension Benefit Guarantee Corporation, PBGC, the pension equivalent to the FDIC is completely insolvent. Like the FDIC, the PBGC is an insurance program funded by premiums paid by its participating members, the pensions. Its entire income is made up of premiums collected in the investment income it earns on those premiums. As the market crash, not only will the PBGC’s portfolio gets slaughtered, so will those of the pensions it guarantees which will then require more funds. As these pensions fail, the PBGC will collect less in premiums. It’s a vicious cycle but things are plenty bad already. The PBGC, which only covers corporate pensions, had a $76 billion deficit in 2017. It has total assets of $108 billion on its books compared to potential loss exposure of more than $250 billion.
By its own estimation, it’s fund to cover multiemployer pensions which makes up about $65 billion of the deficit will be insolvent by 2025. Pensions are in such bad shape now for the simple reason that investment returns are too low and pensions can’t cover their future obligations. Pension fund managers invest in assets like stocks, bonds and real estate in hopes of generating a safe return. Most funds required 7% to 8% return in order to meet their future liabilities. With the interest rates at near record lows, these funds are having to take on more risk in order to meet their minimum return requirements. They’ve reduced their bond allocations and started buying more stocks, private equity, and other riskier assets. Some funds like Hawaii’s pensions fund went even further and dabbled into the incredibly risky strategy of selling put options. By selling a put, you collect a small premium if market stay calm or rise but you’re exposed to unlimited losses if the markets crash like they did when the Dow fell at 2,400 points in a week last month.
At the end of 2017, equities made up nearly 54% of public fund portfolios. The $209 billion New York State Common Retirement Fund has over 58% of its assets in stocks. Kentucky’s $20 million pension fund for teachers is 62% in stocks. These giant funds which are supposed to pay for public and private employees in retirement are piling into stocks at record high valuations and when the volatility hits, it will be devastating. Consider that America’s largest pension fund, The California Public Employees Retirement System, CalPERS, lost 5% of its assets. That’s $18.5 billion in just ten trading days leading up to February 9. Pension funds should never experience that kind of volatility, but the current macro environment is forcing them to make dumb decisions in hopes of generating a minimum return. Luckily, if you’re a smaller investor, you still have plenty of solid investment options available even if you’re investing with tens of millions of dollars.” I’m encouraging you to look for asset-backed loans. To me, it all comes down to taxes and I don’t chase the rate of return. The rate of return is important but so is the withdrawal rate. If any of these interests you, I can show you exactly what I’m doing with my money and I have scaled undoing my money. I have been very fortunate and very blessed to be an affiliate with some very ultra-wealthy people. I have scaled down what they’re doing to what I’m doing based on my income. We’ll do the same for you.
Rich Man’s Roth
Back to the article, “These strategies get more difficult if you have hundreds of billions of dollars. Pension funds are forced to buy stocks and real estate at all-time highs. It stretches valuations and creates huge risk. Still, pension fund allocations to equities are near all-time highs. Ask yourself, what will happen to your retirement if the stock market falls just 20%? What about 50%? There’s zero chance these funds will be able to pay out retirement benefits. They’re taking huge risks at all-time highs and they have zero downside protection because the PGBC is broke. It’s smart to consider some other options.” I have something that I liked that I call a rich man’s Roth, an unlimited Roth, a Roth on steroids. Most people are a fan of the Roth. I’m trying to tie in about four conversations but if you believe taxes are at the all-time low, which they are, when you look at the history of the tax code, we are in some of the lowest tax brackets of history. I’m a firm believer in paying taxes now so when I take my money out down the road, it is tax-free. It is what I call off the radar screen of the IRS.If you say you're going to do something, stick and do it. If you're not going to do it, then don't say it. Click To Tweet
It’s smart to consider and diversify. Let me show you different asset classes. This allows you to put more money away and wait toward retirement before taxes. There’s no downside to that or you tax diversify. If you have a ton of your money in 401(k) and IRAs and you have not paid the taxes on that yet, you got tax diversified. Everything that I do revolves around the tax code, reading and interpreting the current tax code. You have to make long-term plans for retirement, especially if you’re still working. The pension system is broke. I can show you how to have your own little pension system. I’m so convicted by this. I just wish I was at the top of a tall building screaming to everybody, “Wake up and learn about the current tax code.” These current tax brackets expire in 2025 if the radical left the lovers of big government, democrats don’t repeal. It’s not just democrats, the republicans are terrible too. If I could get my hands on Paul Ryan, I would love to get in a boxing ring with him with no gloves and go toe-to-toe with him because he makes me sick. He makes me want to puke because he’s such a habitual liar. He got in Congress talking about being a fiscal hawk. If he’s no more of a fiscal hawk then I am an NFL football player.
The government keeps spending more money than they’re bringing in. Don’t run for election spewing lies and when you get in Congress, you do the opposite of what you said. That’s why so many people don’t like Trump. Trump’s doing things that he said he was going to do. We had three presidents before Trump, Obama, Bush, and Clinton. Trump said he was going to move the embassy in Israel just as the other presidents did. They all said it. They all have recorded sayings they’re going to move it. They get elected and they don’t. Trump gets elected. He says it before he’s running for president. He gets elected, he moves it and then he’s a bad guy. My thing is if you say you’re going to do something, stick and do it. Be a man and stick to your word. If you’re not going to do it, then don’t say it but we all know that’s the problem with politicians. Most of them are habitual liars. They are habitual chronic liars. That’s why I don’t trust the government with my money. That’s why I don’t want to pay any more in taxes. Don’t cram this 30-year road crap down my throat. I’m talking about Baton Rouge, you do have a right to vote against it. I’m already paying too much in taxes. I don’t trust the government with more money.
The answer to problems is not throwing more money at them. Let’s say you walk into the grocery store with $100 bill. You know when you walk in that you have $100 to spend on groceries. Any person with common sense knows that. If you stick more than $100 worth of groceries in there, you’re going to have a problem when you get to the cashier. The government doesn’t act like that because most of these elected idiotic pompous elite politicians, they know that it’s not their own money. It’s our money. It’s the taxpayer’s money. When I say government, I’m talking about the taxpayers. I don’t want to pay more in taxes. If you think we’re paying too little in taxes, don’t call me because we’re not going to be on the same page from day one. I like doing business with people who believe what I believe and right now the government is too big. We’re paying too much in taxes. When I can show someone how to avoid ever paying taxes and Social Security, it’s awesome because I think of my parents. My parents got hammered and got screwed. The government stole money. How do you call it when the government takes money from Social Security? The government took the money since my parents were working for Social Security. They never got a dime from it. That’s theft.
The Last Weekend Of 2018
It’s the 29th day of December 2018 and the last weekend of the year. What are your plans? As we approach the New Year, I encourage you to look at some tactics and some strategies that I do with my own money. I’ve been very fortunate to be around some very smart people that are older than me, smarter than me, wealthier than me, and richer than me. I’m not afraid to ask question. I’m trying to teach my kids, “You’ve got to ask questions, kids. Don’t be afraid to ask questions.” I have been fortunate to be with some smart people, successful people in life that are 20 to 25 years older than me and I’ve asked them, “What did you do when you were 40 that you regret doing? What did you do when you were 45 that you regret doing? What did you do when you were 45 that you were happy that you did?” I asked those questions and they have shown me some strategies for making money and it’s been a good run. The word diversification is sometimes overused but everything that I do, I follow the current tax code. Just rattling off some of those tax codes and some of those deals with oil and gas. Oil and gas have phenomenal tax deductions for investing cash in oil and gas. There’s nothing else out there like that that I know of.
The IRS section 469(c)(3), you can look it up, sections 611, 613, 613(c)(6), 263(c) 59(e). All those have to do with how the government taxes money or gives deductions away or makes deductions possible legal for investing money in oil and gas. The price of oil per barrel is low but that’s okay. It just made sure your checks are a bit lower. Number one, we’re going to hit it all and number two, it’s the price of oil per barrel. Number three, how many barrels being pumped per day? There are risks in investing in oil and gas. There are risks in everything. There are even risks in your and your FDIC insurance that you have at your CD at the bank. That’s riskier than my strategies. If you are contributing to your 401(k), if you are contributing more than the minimum to receive the match from your company, and if you’re open-minded, call me. Let me show you what I’m doing with my own money. I encourage you to learn about certain parts of the tax code that benefits you. I have another article here. This country, financially, we’re in trouble. We are fiscally in trouble. We were beyond getting out of it but we’re so much in debt. They need more taxes. The US government needs more of its citizens to pay more in taxes. That’s my belief.
I don’t want people to dip it into my money. I want to pay less in taxes. I believe we already paid too much. The government is fiscally terrible. Saying the government is terrible has given them a phenomenal compliment. They are terrible at managing money and I would love to debate anybody on that. They’re absolutely horrific. It makes me sick to my stomach the way the government wastes money so why would any tax paying citizen with any amount of common sense want to give the government more money to waste? I’m against that. If you want to give the government more of your money, I’m sure you can make a donation to the US Treasury. It’s funny because a lot of pure people who want big government, they say all that but they’re the first ones to benefit from a tax cut. I can promise you, they’re not sending more money to the government. They’re paying as little as possible, but it benefits them politically to speak otherwise.The problem with politicians is that most of them are habitual liars. Click To Tweet
If you believe that we are not paying enough in taxes, don’t call me because we’re not going to get along and that’s okay. We all have the right to our opinion. I’m just saying, “Don’t waste my time.” I’ll be wasting your time and you will be wasting my time so don’t call me. If you do believe in paying less taxes, then call me. I’m no CPA and I’m no tax attorney but I can show you what I’m doing with my own money. Here’s an article right here that is titled This Tiny Corner of Rhode Island Shows Us the Future of Social Security Scene. Social Security is a big hot button for me. I can show people and I often show people how to avoid paying taxes on Social Security and yes, it’s legal. It’s possible. I teach them how to get some of your wealth off the radar between IRS. The government tries to screw us with this provisional income deal. I can show you how to avoid that. “Many pension funds and Social Security Systems globally do not have enough money to cover the retirement obligations they owe to millions of workers. For example, in the US alone, pension funds were about $7 trillion short of the funding they need to cover the promised benefits.” Let me tell you what $1 trillion is. If I said, “Billy, here’s $1 trillion. Go spend this $1 trillion.” You’d have to spend $10 million a day for 279 years to spend $1 trillion. These pension funds are $7 trillion short.
“This Tiny Corner Of Rhode Island Shows Us The Future Of Social Security Scene”
“We spend so much time discussing this topic because it’s relevant to you no matter your age or geographical location that’s why we talk about Social Security all the time. More importantly, while the state of the pension fund and social security in the US and around the world is quite dire, there are still many solutions you can implement to secure your retirement savings. The United States Court of Appeals for the First Circuit was an interesting glimpse of the future when it ruled on an obscure case involving government pension obligations.” You’re not going to hear about this on Fox News, CNN and MSNBC. You’re not going to hear about this stuff because it’s not important for the mainstream media because it’s the facts. It’s the truth. “Ever since the mid-1990s, police officers and firefighters in the town of Cranston Rhode Island had been promised they have pension benefits upon retirement. Facing critical budget shortfalls at the Rhode Island government called fiscal peril, the state legislature voted to unilaterally reduce public employees’ pension benefits. Even more, these cuts were retroactive. They didn’t just apply to new employees. The changes were applied across the board. Workers who had spent their entire careers being promised certain retirement benefits ended up having their pensions cut as well.”
“Even the court acknowledged that these changes substantially reduced the value of public employee pensions provided by the Rhode Island system. A number of municipal employee unions sued and the case of Cranston’s police and firefighter unions made it all the way to the federal court. The union’s argument was that the government of Rhode Island was contractually bound to pay benefits. These benefits had been enshrined in long-standing state legislation and they should be enforced just like any other contract. The state government disagreed. In their view, the legislature should be able to change laws even retroactively whenever it suits them. The first circuit court issued a final ruling and sided with the State of Rhode Island. The government has no obligation to honor its promises. News like this will never make major headlines but here at Sovereign Man, our team pays very close attention to these obscure court cases because they often set a very dangerous precedence. This one certainly does because Social Security is even in worse condition than the State of Rhode Island’s perilous pension system.”
“We talk about this a lot in our regular conversations. According to the Board of Trustees for Social Security which includes the US Treasury Secretary, the US Secretary for Health & Human Services and the US Secretary of Labor, the Social Security Trust Funds become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. Once again, that’s the Treasury Secretary of the United States saying that Social Security will run out of money in sixteen years. You’d think this would be shouted from the rooftops, especially given how long it takes to save for retirement. Yet instead, the news is ignored or flat-out rejected by people who simply want to believe either that it’s not a problem or that the government has some magical solution. The First Circuit just showed us what the solution is, cutting benefits.”
They are already doing it at Social Security. The government caused this provisional income. If you are married and filing jointly and you have an income of $44,000 or more which the government costs provisional income, 85% of your Social Security will be taxed at whatever tax bracket you’re in. It baffles my brain that that law passed. Every person who voted for that in Congress should be hung. You’re talking about people’s money here and you can’t go back and do that. You put in into Social Security and expecting something. The government dangles the 401(k) and the IRA. This is crazy. I’m not a conspiracy theorist but when you think about the system and the way it is, the government dangles a carrot in front of you. They want you to put money into a 401(k) and an IRA to kick the tax can down the road. I meet people all the time. They have $750, $700, $500,000, $1 million, $1.5 million in the 401(k). They worked 25 to 40 years and they have this much money in the 401(k) and they have not paid taxes on that yet.
You put the money in your 40(k) for 30 to 40 years to live on in retirement. When you turn on your Social Security faucet and when you start receiving Social Security, if you have provisional income which the government looks as anything other than Social Security, they’re going to tax your Social Security. I’m like, “Hold up, US corrupt government. I know you’re corrupt but hold on one second. I’ve already paid taxes on my Social Security. I’ve already done that.” They’re like, “I know, Hollis, but we’re going to screw you just as we screwed your parents. Hopefully, you live long enough to collect your Social Security but your parents didn’t.” I’m talking about a couple of conversations here. My parents put in Social Security their whole lives and both died before they ever got a penny of it. Mom died at 54 years old because ovarian cancer and never got a penny. When she passed away, my dad received a $255 check to help with my mom’s burial expenses. It’s so nice of you, government. Thank you, government, for giving my dad $255 to help bury my mother.The news is ignored or rejected by people who simply want to believe that there is no problem. Click To Tweet
My dad died seventeen months later and he never got Social Security. Where are all the money at? Can anybody out there answer that? Where’s the money? It’s safe to say the government loves people like Hollis and June Day. They love them. They put into the system for years with no choice. They’re taking money from you and from us. Why do we give an entity more money when they can’t manage what they have? The whole system is crazy. The government dangles the 401(k) in front of us and entices you and encourages you to put money into the 401(k) to yet penalize you down the road in retirement if you take money out of it while you’re drawing Social Security. Does that bother you? It bothers me and I’m not you. I just don’t think people are realizing what’s going on. The news is ignored or rejected by people who simply want to believe that this is not a problem and that the government has some magical solution. The government has no magical solution. Their solution is tax, tax, and tax. That’s all they want to do. A lot of politicians have failed in their career. A lot of these guys have run for office. They’re terrible at managing money but yet they’re making the laws for us about our retirement and it’s crap.
Getting back to this article in Rhode Island, “The First Circuit just showed us what the solution is which is cutting benefits and now the government has legal precedent to do so. They can retroactively slash whatever benefit they want in their sole discretion regardless of what legislation exists or what promises have been made in the past. Let’s be smart about this. The clock is ticking. Sixteen years may seem like a lifetime away but with respect to retirement, it’s nothing. Securing a comfortable retirement takes decades of careful planning and a lot of folks are going to have to catch up. Fortunately, there are a lot of options available but you’re going to have to take deliberate action. For example, you can set up a more robust structure to help you put away even more money for retirement and invest in safer and more lucrative assets that are outside the mainstream.” That’s exactly what I am doing with my own money. Don’t rely on the government to fix this. The First Circuit Court in Rhode Island affirmed without a doubt that government promises aren’t worth the paper they’re printed on. All this means is you should start thinking outside the box.
“Social Security Proposes Immediate And Permanent Reduction In Benefits”
Here’s an article that titled Social Security Proposes Immediate and Permanent Reduction in Benefits. “On a deep, dark evening last June in the spectacularly celestial deserts of Northern Chile, scientists made a phenomenal discovery. It was a supernova. One that they named ASASSN-15lh. This wasn’t just any supernova. It was the biggest and brightest supernova ever recorded. Supernovas are exploding stars whose ejected mass and energy can create a light show so brilliant that they can sometimes be seen with the naked eye in our own night sky. The star was so far away from our planet that it took billions of years for the light from the supernova to reach us. It’s mind-boggling to think about. In a way, the same can be said of many of the financial risks that we face. Consider the exploding star of Social Security, one of the largest and most important pension programs in the world. Literally tens of millions of people depend on it. The Social Security Administration itself reports that 62% of recipients rely on the program for at least half of their income. Further research by the Center on Budget and Policy Priorities, CBPP, shows that without Social Security, 22.1 million Americans would fall below the poverty line. Needless to say, major cuts to the program would have nuclear effects yet year after year, the Social Security Board of Trustees publishes an annual report that describes the program’s terminal financial challenges in excruciating detail.”
I’m not making this up. This is on the Social Security website, “They minced no words and plainly stating that Social Security pays out far too much money and it takes him for too little. According to the 2017 Trustees’ Report, ‘Trust Funds reserve become depleted in 2035. They’re practically giving us a date that we can circle on the calendar and mark it end of Social Security. The Trustees go on to lightly propose solutions, including an immediate and permanent reduction in benefits to all current and future Social Security recipients. In case you’re wondering who these whack-job Trustees are, they include the Treasury Secretary of the United States, the Secretary of Health and Human Services, and the Secretary of Labor. These aren’t just random people. We’re talking about politicians at the highest levels of government who are telling us that Social Security is running out of money and calling for an immediate and permanent cut in benefits. Given the tens of millions of people who depend on the program, the consequences of either scenario would be catastrophic. Sadly, this is not a new problem. The Trustees have been screaming for years that Social Security’s finances are unsustainable yet year after year, the problem was ignored which brings the end-game one year closer and the ultimate solution that much more painful.”
I’m going to have a phenomenal guest on this show. Rebecca Walser is going to be a guest on my show. We’re going to get into how the 401(k) was formed, why the 401(k) was created and why it’s not a good place to put money, especially if you think taxes are going to have to go up. What makes Social Security a gigantic supernova? “The star exploded years ago but it will take until 2035 for everyone to realize it though frankly, it could be sooner than that. People are living longer than ever before. The average life expectancy in the US is a full eighteen years longer than it was when Social Security was conceived back in the 1930s. This means that Social Security will have to pay out more money to more recipients for much longer than they’ve ever had to pay before. This will be an enormous cost to the program. Simultaneously, despite all the celebration of the low unemployment rate in the US, the labor force participation rate is still near a multi-decade low. This means that there are fewer people in the workforce who are paying into the Social Security System. According to its own projections, Social Security requires three employed workers to support one retiree. They watch this worker-to-beneficiary ratio very closely. In 2010, it dipped below three for the first time and in 2013, it hit 2.8. The Trustees’ projections show it will continue to fall as low as 2.2 pretty soon.”
If you look at the big picture, a growing number of beneficiaries is being supported by a declining number of workers. This isn’t rocket science. It’s pretty obvious what’s going to happen. The collective response is to simply ignore the problem or outright refuse to believe it as if this is some crazy conspiracy theory. This is not a theory. It’s simple arithmetic based on government data, backed by the same conclusions reached by the Treasury Secretary of the United States. The bad news is that none of us can fix Social Security. We sure can’t convince someone to prepare for a problem that they refuse to acknowledge but we can easily do something about it ourselves. After all, this is one of those major problems we’ve been talking about and one that can easily be avoided. The good news is that many of the solutions haven’t changed with the new tax law.” You can still do some things. Everything I do, everything goes back to the current tax law. I’m no CPA and I’m no tax attorney. I can show you what I’m doing with my own money. I can show you how to limit to decrease your taxable income and you save more for retirement. Call me at 202-SAGE. That’s 202-7243. The website is SageMoneyRadio.com. You can send me an email by going to the website. God bless you. God bless the USA.
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