Did you know there are things that your government does not want you to know or remember?
Like, who created IRA’s and 401k’s. That’s right. Not the banks. Not Wall Street. Not, Insurance Companies or Investment Companies.
They understand some simple rules of engagement. Have you ever heard of the Rule of 72?
You take your interest rate and divide in to the number 72 and it tells you how fast your money will double in simple interest. (I.e., 7% into 72 equals ten years) or 72 divided by 7 = 10). So, 72/6=12 or 72/4= 18 0r 72/2=36 or 72/1=72. There you have it.
It also works for debt, inflation, and future costs of living analysis. So, if you could get 4% steady return on $10,000 for 40 years, you could go pull out over $40,000 just letting it sit somewhere. If you put that money into an IRA or other Qualified program, you can defer the taxation on every $2000/year. So, lets play this out?
You are 25. For 40 years every year you put $2000 away tax deferred. SO, you do not pay $440 in in income tax at a 22% tax bracket. SO, for forty years you contributed $80,000 and did not pay approximately $18,000 in taxes. You did well and now at 65 it has grown to $240,000! Do you pay back $17,600 or nearly $50,000? What is worse, if you do not need the money because of other wise investments, like your home and other debt you did not incur. You have enough in Social Security or Pension coming in and you do not access the funds you have accumulated. AT 70 ½, you will get a letter from your Uncle Sam reminding that you never paid taxes on that money. If the Required Minimum Distribution exceeds the taxable income limits you will now pay extra income tax on your Social Security or worse. You could even forfeit your Medicare benefits or pay higher rates because of your income!
You could forfeit access to Long Term Care Benefits and even force taxable burdens on your survivor benefits or estate? So, yes you gained. But it was a tremendous gain to the government. In fact, 3X the extra taxation! Now multiply that by billions, maybe trillions in Social Security benefits paid in to a system that does not pay back for 40 years...
Add in all the people that die before they collect, the widows too young to receive or the Bread Winners that survive the lessor contributor that never receive a penny. Or even children that never receive their benefits because their father was never identified...
This system needs to be held accountable! It is time that you elect someone who will hold our government responsible for misappropriations, misinformation, and not educating consumers on how to truly gain wealth. Go to any major city and pick out the 3 largest buildings, and more times than not, they will have a bank, insurance company, or a government name on top and in lights!