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The retirement gamble

April 26, 2013

The following link is to a video about the state of retirement in America. The system has gone in the wrong direction over the last decades, and now we’re paying the price.

The Retirement Gamble

  1. April 26, 2013 3:07 pm

    This was a great show on PBS and I think it is worth watching. I reviewed it on my blog.

  2. Wayne permalink
    April 29, 2013 10:07 am

    Enjoyed the show….However, I believe they omitted two extremely important factors that the individual investor cannot control for: 1) inflation and, 2) tax increases. First, inflation, even if we believe the government’s statistics that inflation is running around 2-3% annually this erodes savings at 2-3% a year. When you tie this rate to the fees mentioned in the PBS article, inflation further reduces any capital gains realized from a 401.

    Secondly, most all the money that has been invested into 401’s has been through tax deferred accounts. This means that when it comes time to draw money from the account it will be taxed at ordinary income. So what ever your tax rate is at the time of withdrawal that will be the tax rate due.

    Given the current stimulus and QE spending, coupled with future projections of spending, it is very likely that inflation will increase and taxes will go up to cover the unprecedented debt bubble. At any rate, future costs to those holding money in tax deferred accounts will go up. The burden to pay this debt will most likely fall on those with the means to pay. Therefore, I believe that any tax deferred account will get punished.

    It is true that Wall Street Banks charge fees…..But, it is the Fed that is responsible for keeping inflation under control and the Congress that is responsible for our tax code. Wall Street clearly plays a role as does the Central Bank and elected officials.

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