Retirement Guys: The State of Our UnionWritten by Nolan Baker Mark Clair | | firstname.lastname@example.org
President Obama gave his State of the Union address this week to millions of us watching as he discussed his vision for the future. We wish the President the best and hope he does what he can to make America stronger and safer for not only this year, but for generations to come. At the same time, we realize that often what is said by our political leaders in public speeches and what becomes a reality is often too different things.
Remember George H. Bush’s speech when he said “Read My Lips, No New Taxes.” As we now know, it didn’t work out that way. President Obama’s message was during his State of the Union address was centered on unity. A Utopian society sounds nice. In reality debating the best possible solution is what makes America well America. Achieving his message could be a challenge, as polls show more than half of Americans now disapprove of his leadership. Instead of debating his message, let’s see what parts of his speech apply to you and your family.
More spending on core projects will be needed in the future according to The President. Although Congress, not The President sets the budget, he did suggest freezing discretionary spending that could save $400 billion over 5 years. In our experience in working with Retirees, it is extremely rare to find a family that tells us they became financially successful spending their way out of trouble. Instead, the overwhelming majority of financial independent people we encournter are savers, not spenders. Make financial responsibility a personal mission. Even though the stock market and the economy have improved, don’t spend more. Instead, save more and continue to spend wiser.
The government has the ability to raise taxes to cover debts; a family doesn’t have this luxury. According to www.usdebtclock.org, The US National Debt is now over 14 trillion dollars. That means every US Taxpayer would now owe over $125,000 to cover the current national debt. To compound the program, Social Security, Medicare, and the Prescription Drug Program alone are over $112 trillion in unfunded liabilities for our Country. That surpasses $1,000,000 in liabilities per US Taxpayer to cover these obligations.
Realizing these unfunded liabilities are a huge concern for our Country, The President talked about painful cuts in “cherished programs” during the State Of The Union. He did not specifically say which programs should be cut. The solution for an individual family is to not only to maximize savings in their own personal retirement accounts, but at the same time to set up an account to protect them from a health care crisis. If the government programs changed in the future, you and your family would have a backup plan. Insure your future.
Simplify the tax code was another topic discussed in the speech. This has been promoted by both political parties for years, but in reality never happens. Maybe one day it will. Until then, individual families should realize that many of the Bush Era Tax Cuts have been extended for a period of two years and some new tax laws went into effect in 2011. Take time now to learn how this applies to your own individual situation. The honorable Learned Hand said it best when he explained there were two systems of taxation, one for the informed and one for the uninformed. Numerous tax laws are currently in effect that could have a positive impact on every family. Just take time to get informed.
We realize, and hopefully others do too, that political speeches such as the State of Union should be uplifting. We are all Americans and this is the greatest Country in the World. It feels good to have hope and wish for a brighter future. Just remember financial decisions now and in the future will come out of Washington that will be beyond one person’s control. At the same time, each of us, as individuals, can resolve to be financially independent on our own and make decisions we can control. You can do it, you deserve victory!
For more information about The Retirement Guys, tune in every Saturday at 1 PM on 1370 WSPD or visit www.retirementguysradio.com. Securities and Investment Advisory Services are offered through NEXT Financial Group Inc., Member FINRA / SIPC. NEXT Financial Group, Inc nor its representatives provide tax advice. The Retirement Guys are not an affiliate of NEXT Financial Group. The office is at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537.