Talk to a Local Resource Specialist, it’s Free! Call 800-201-9989

Inflation and Taxes Could Rise. Are You Ready for Retirement?

Share This

To learn more about Senior Tax Advisory Group, CLICK HERE.

Today’s economic conditions are much worse than coming out of the Great Depression. During that period’s economic recovery, the U.S. experienced historical debt and tax levels, paid for by the American people when tax rates were above 40% for over 40 years (1940-1981). Many older Americans recall the high-interest rates, high prices, and people displacing from the weak economy.

While the CARES Act provided a one-time payment to individuals and for business stimulus, it will not solve our country’s future economic problems. Government-funded recovery will likely lead to higher taxes, and the debt will be collected from U.S. taxpayers to decrease the Federal deficit.

What has changed since The Great Depression is the debt the U.S. carries, now close to $28.7 Trillion with a 107% Debt/GDP Ratio (Gross Domestic Product). Our debt to GDP ratio indicates that the U.S. owes more than it produces and consumes domestically, or exports. How do economies recover? By producing and selling more than its expenditures or by raising the prices of their products. How do government coffers improve? Through tax collection. Both create problems for everyone, but especially for those nearing or in retirement.

In any market, investors must always consider the five risks that can sideline their financial future:

Inflation Risk- Investments not optimally positioned to address the rising costs of goods and services will deplete a portfolio.

Taxes Risk- Increased taxes erode the investment capital; the investment type and timing are critical.

Longevity Risk- Investment capital is not enough for supporting longer lives and long-term care needs.

Survivorship Risk- Unexpected loss of a life-partner leading to lower investment capital.

Market Risk- Loss of principal value can decrease investment capital.

The impact of inflation and taxes due to COVID-19 will continue making it critical that you consider your retirement portfolio’s allocation and prepare for your financial future.

 

Editor’s Note: This article was submitted by Darian Andreson, of Senior Tax Advisory Group and may be reached at 719-596-4844 or by email at Info@SpringsTax.com

Item Details

Book / Edition
Colorado - Colorado Springs