THE NEW RULES OF RETIREMENT SAVING • 43
seconds. One trillion seconds ago — 31,688 years — Neanderthals stalked the plains of Europe.”
Starting around the year 2020—as soon as next year—some an- alysts expect the U.S. public debt to rise sharply. Because, as we mentioned in chapter three, more and more baby boomers will be retiring and drawing on Social Security and Medicare. The gov- ernment will owe more people benefits, but not have more reve- nue (i.e., taxes) coming in. That’s going to cause a big imbalance. 13 Someone is going to have to pay for this mess. That someone is you. Before we go on, let me make one thing clear: I’m an actuary, not a CPA. I’m not offering you professional tax advice, I’m just educating you on some risks and realities around taxes and your retirement funds. Be sure to consult with your CPA or accountant if you have specific questions pertaining to your savings plans. Magic Ball: How Taxes Could Hurt Your Savings If you don’t believe me that taxes are going up, consider one of my clients, Mattie. Mattie owns a catering company. She’s very successful, catering not only weddings and special events but a growing number of corporate lunches and dinners in our commu- nity. A few years ago at tax time, Mattie discovered she owed $1,266 more in taxes than she planned. She didn’t have more income than the year before: profits from her catering company were strong, but flat. And she knew her tax bracket hadn’t changed. There had been no new tax increases announced by Congress. So she was more than a little confused. 13 Jackie Calmes. New York Times. Sept. 17, 2013. “Budget Office Warns That Deficits Will Rise Again Because Cuts Are Misdirected.” http: // www.nytimes.com / 2013 / 09 / 18 / us / congressional-budget-office-predicts-un- sustainable-debt.html?_r=0.
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