401(k)'s and IRA's can be Hazardous to your Wealth !

 

Millions of Americans accumulate money in Tax Qualified plans, such as IRA's, 401(k)'s, SEP's. An income tax deduction is allowed, for contributions up to specified annual limits, and funds grow without taxation during accumulation. Withdrawals prior to age 59 1/2 will incur a 10% penalty and Distributions are fully taxed at your highest marginal tax rate.

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Will you be in a lower tax bracket when you retire? If you're successful, the answer is NO!  In all liklihood, you won't have many of the tax deductions  enjoyed during your working years, i.e.  dependent deductions and the mortgage interest deduction. Do you expect your future tax rates to stay the same, or to be lower? Multi Trillion Dollar Deficits and an ever increasing National Debt will result in even higher income tax rates, and those with significant money in tax qualified plans will be taxed at the highest marginal tax rate.

 

Ready to lose 50% to 80% of your wealth? Not only is every of dollar of distribution taxed at your highest marginal tax rate, but any remainder will be taxed at death. Your? money is under Government Control! Massive Government Debt can lead to draconian measures, such as Nationalizing your qualified savings into Social Security, with the government ultimately deciding how much you will get, on a needs basis. Don't think this can happen? Poland instituted such a program in 2009.