Get your piggy bank in order! It looks like we are going to have one of the largest overhauls of the tax system ever. I’d like to suggest that we take any gain that comes our way from the new tax code and save it. Pronto! I’m willing to bet we are going to need it in retirement.
I am all for cutting taxes, but this package comes with a 1.46 Trillion dollar cost that will eventually have to be re-paid. How will that happen? You could raise taxes, but that is political suicide. Unlikely. Far more likely that we will see an effort to reduce Social Security and Medicare benefits. The cuts to taxes may not have been evenly distributed, but I bet the bill for our current overhaul will be evenly split.
So to prepare for retirement, you are going to need more savings than before. Time to take your tax savings and invest them. This may not happen for several years, but the economy will slow one day, we’ll all look at the massive government debt pile, and the talking heads on TV will start the chorus of fiscal responsibility.
Be smart. Get ready for your share of the cost. Start saving your windfall today!