BECKY RUBY SWANSBURG | NEIL WILDING With Foreword by Dominick Caiati
THE ROAD LESS TAXED HOW TO OUTSMART WASHINGTON AND TAKE CONTROL OF YOUR RETIREMENT
The Road Less Taxed HOW TO OUTSMART WASHINGTON AND TAKE CONTROL OF YOUR RETIREMENT
Becky Ruby Swansburg Neil Wilding With Foreword by Dominick Caiati S t o n ewood Fi na n ci a l L OU IS VILLE, KE NTU CK Y
Copyright © 202 6 by Becky Ruby Swansburg and Neil Wilding. Ao rl l trriagnhst ms ri et tseedr vi ne da. nNyo f po ramr t oo fr tbhyi s apnuybml i ceaatni os n, i nmcal uy dbi en gr epphr oo tdouccoepdy, i dnigs, t rr iebcuotredd- imn igs, soi or no tohfe trheel epcut rbol ni sihc eorr, me xeccehpat ni inc at lhme ec tahs oe dosf, wb ri ti ehfo qu ut ot ht ae t pi orni os r ewmrbi tot edni e pd eirn- cl ar wi t i. c Fa ol rr epv ei er wmsi sasni odnc er retqaui ne sot tsh, ewr rni toen ct oo mt hme e pr cui ba ll i us hs ee sr , paedr dmriet st es de db y“ Ac totpe ynrt ii go hn t: Permissions Coordinator,” at the address below. DP roems iidnei cnkt Ca na ida tFio u n d e r C8 aWi art ii gFhi tn Sa tnrceieatl , S1esrtvFi cl oe os ,rL, SLuCi t e 1 0 7 W2 0e3s. t9p5o2r. t0, 5C0T60 6 8 8 0 http://www.caiatifinancial.com The Road Less Taxed / Becky Ruby Swansburg and Neil Wilding. —1st ed.
t r o e t I i i r r theSroi,skdsivaendriogphpt oinrtuannidtiepsrreeptairreemtoencthmanaygebryinoug.r thinking, your af ucttui orne s. , Haenr de ’, s mt oo sgt i voi fn ga lyl , o ut h em odreec i cs oi onnt sr o yl oouv emr aykoeu ra bi nocuot myeo ui nr retirement. DP roems iidnei cnkt Ca na ida tFio u n d e r Caiati Financial Services, LLC l e s sT hc oant ’tsr owl hoyv eIr bt heel iiervree tti hr eemteonpti cass sceotvs etrheadn itnh etyhti sh i nb ko .o k a r e s o iemv aplourattaen t .y oOunrc e c yuor rue’ vnet rreeatdi r eimt , eynot u ’ lal pbper o ba ceht t e r– p raenpda r emda kt oe adjustments where necessary. I’m excited for you to learn: • Wr i shkyytoaux ef as cme a–yabned thhoewb itgog ee vs ta, l lueaatset yuonudre er sxtpooosdu rr ee .t i r e m e n t • Wragheerteodtaaxye’ss lcoowueldr rbaetehseatodipnrgelpoanrge-. term - and how to leve- • Hwohwe nt oi t dc eo tme rems ti no ey tohuer ar me t oi ruenmt eonf tr ii ns kc oymo ue’ r- ea nwdi l lhi no wg t too t aa lki -e gn your approach with your comfort level. 'l d e l e m m n e t a i n k f t y e . A a n n b e d w o l t d h a a p r t r e e k a d n s i o c w t t h io l a e n t d : g I r e n e q w r u e i a i l r l d e h i n e a g lp t h l y o i o n s u g b - b o te e o r t k t m , e y r o s p u t r r ’ e l a l p t b e a e g r e y a b Foreword a n dI ’ mc h ac no ng ef i dt heen twtahyi syboouoakp ipsr og oa ci nhgytoou cr hf ua nt ugree tihner we tai rye my oeun tt.h i n k - c in h c a O o n m v g e e e r s w t i h n e e W d p e a a p s s e t h n i f n d e g w o t o n y n e i a n c r a s r n , e t i h t ir ' a s e v m e b e e a c n o t b . m i W g e h i i m n a c t p r i a e s c a t s t i a n o x n g e l d y u , s c w le a h a n e r d n t t h i h t a ’ e s t tnaexwe dl e, ahdoewr s iht i’ sp taanxde dp ,r iaonrdi t iwe shcoo mi t ’ es ttoa xpeodwfeorr. a r e a l l c h a n g i n g a s r c e h t a H i n r o e g m w es e e v n in e t r W , a p a a p s s r h I o i n a m c g h e to e e n s t . w a A r i n t e h d n t s h o a t i v s e o m r p s e ti l a m i n k i s e z e m y d o a u n t , o y I s w a o v i f t t e h e r n s s t a m f n in d a d y t t h h h a e e v s i e e r fo i l n e
Contents Prologue ............................................................................................................... 5 The Challenge Facing Washington .......................................................... 7 The Impact of Washington on Your Retirement .................................. 8 The Growing Government Problem in Your IRA ................................. 11 The New Risk on the Block ......................................................................... 13 Preparing for the Risks of Today — and Tomorrow ......................... 14 Where it All Began: Market Risk ....................................................... 14 Up Next: Income Risk ........................................................................... 17 Today’s Emerging Risks ....................................................................... 18 But Will it Impact ME? ................................................................................. 21 Retirement Reality ..................................................................................... 23 And Then Washington Gets Involved .................................................. 26 A Silent Partner in Your IRA .............................................................. 26 How Much Will This Partner Take? ................................................ 28 We’re in Trouble ............................................................................................ 31 The State of U.S. Revenue & Spending ................................................. 32 The State of U.S. Spending .................................................................. 33 Adding Up the Numbers ...................................................................... 34
The Impact on Today’s Savers ............................................................. 36 Can We Fix Our Broken Budget? (And Why the Answer Matters to YOU) .................................................................................................................. 37 1 | Reduce Mandatory Spending ............................................................. 37 2 | Reduce Discretionary Spending ......................................................... 41 3 | Raise More Revenue ............................................................................. 42 How Can Taxes Rise? Let Me Count the Ways ....................................... 45 Changing Tax Bracket Rates ................................................................ 46 Changing the Amount Applied to Each Bracket ............................. 46 Changing Deductions ............................................................................ 47 Creating New Taxes & Taxing New Things .................................... 47 Who is IRMAA? ......................................................................................... 48 The Tax Wave of the Future ................................................................... 50 So Taxes CAN Go Up. But Will They? ................................................. 52 That Beautiful Bill ........................................................................................... 53 Lower Taxes Are Here to Stay (For a Little While … ) ..................... 53 But Wait! There’s More! ...................................................................... 56 So … Taxes are Low, But Higher Taxes are Coming? ................... 57 Your Tax-Free Secret Weapon .................................................................... 61 The Roth Revolution ................................................................................. 63
What’s a Roth Conversion, and Why Does it Matter to Me? ............. 67 Evaluating Roth Conversions ................................................................. 68 Cut the Government Out of Your Retirement ........................................ 69 How to Do It .................................................................................................... 71 Evaluating the Need to Convert ............................................................. 72 1 | Will I likely pay more total taxes if I keep my IRA or if I convert to a Roth account? ................................................................................. 73 2 | Will converting funds move me into a higher tax bracket during my conversion years, and if so, how much more will I pay? ....... 74 3 | Will converting funds impact the government fees I owe each year, aside from taxes, and if so, by how much? ............................. 74 Balancing Taxes, IRMAA, and Bracket Drift During a Conversion ........................................................................................................................ 75 Next Steps for Ryan, and Maybe for You, Too ................................... 80 Making the Complex Simple ....................................................................... 81 Change in Situation, Change in Taxes .................................................. 82 A Complete Approach ................................................................................... 87 Analyzing the Variables ............................................................................ 88 A Wake-Up Call ......................................................................................... 92 Addressing Tax Risk in YOUR Retirement Approach ..................... 93 But Wait! There’s More ................................................................................ 95
Epilogue ............................................................................................................. 97 Protecting Your Retirement from Washington ...................................... 97 A Retirement Workout ............................................................................. 98 About the Authors ....................................................................................... 101 Becky Ruby Swansburg .......................................................................... 101 Neil Wilding ............................................................................................. 103 Acknowledgements ...................................................................................... 105
Prologue sf oorl vae nwt aeyn ot ou gi nh cteon mt i veiezte t Ah emgerroi cwa innsg tnoeiends.uCroe ntghreems ss ewl vaes sl,oionk ti nh ge p riCvaotnegmreasrskteatk, aegs aai nlsottt hoef mf l aekd ifcoarl cboesitnsgoifnaegfifnegc t. i ve . ( In f a c t , i f tt hr ue sr te i’ sn Co no ne gtrhei snsg. At hr ae tc ebnr ti nPgeswARme se er iacracnhsp tool gl feot uh ne rd, 7i t2’ sp ae r lcaecnkt oo ff I By Becky Swansburg “A danger foreseen is half avoided.” ~ Proverb no ul ra tnea 2t i0o0n4’ s, CI af op ui tnodl bmu iyl sdei nl fgs. iItwt i na gs tihnear ef ot ou rd-ihsoc uu sr sml oenegt i-nt egr imn me A m t c b a t e r h r e e . otfi mC oen, gI rwe sass wahyoohuandg bCuai pl ti taocl aHr ei lel rsat as faf epr ,h wy soi cr ikainn gb ef of orr ae rwui nt hn iontgh ef or rC Co on ng rger se ss iso. nAanl dl e oa nd et rhsa tt of aaldl ddraeys si na 2g 0r o0 w4 , i nwge pgraotbhleerme d. ct ha ei Td ght o e o v n c e , o r a v n s e m n r e o t n h w t e , i w m r a m a s n e y c d o i A c n m a c l e e e r r x n ic p e a e d n n s t s h e r a s e t l i i n e th d r o e o s t n e ir e M p m r e o e d g n i r c t a a . m r A e n s a d w n i d n e r M 2 e 0 e n 0 d o 4 i t - ,
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6 • BECKY RUBY SWANSBURG AND NEIL WILDING Awma se trri cuaenfso rh abvoet ha Rneepgua bt ilvi ceavnise wa nodf DCeomn gorcersast s—. a n d t h a t n u m b e r 1 ) m i nBdust tahcirsops as rtthi ceupl aorl imt i ceaelt isnpgebc rt rouumg h: tMt oe gmebt he er sr soof mC oe nt rgur leys sb rwi gi ht ht df i inr ae nc tc ee ,x apne dr i es nu cp ep ionr tl osnt ag f- ft ee rr sml ickaer em, ey xs teel fr nwahl oe xhpaedr tsspoenn at gt ihneg paansdt fgerwapmhiocnstthusdideisg.ging into government data, statistics, and demo- o gr m e A m s f s t e e g n r e d t a a l m l t i t o o h r n a e s t A r f e o m s r e e m a ri r o c c a v h n i , n s w g t e o f o w p r e u w r r e a c r h f d i a n . s a H e ll o l y o w r n e , g a w - d t e e y r t a m o s k d c e i a s d r c , e u c i s o n s u s o u ld u r r a C n r o e c n c e - - , sf eol lmt oo rgeo voef rtnhme er enst ppornosgirbai ml i tsy lfi eklel Mt oetdhiec aprrei vaantde Mmeadr ki ceatisd a. n d l e s s t c e o r u I n t ld o w o n a n ’t s . d ar el own gt omae ec tl oi ns ge , mwaer kf ienda lbl yy icnatme ne s ue pd ewbi at ht e t. hBeu ta na ss wt heer :a If t- A mOe fr iccoaunrss et o, tphuerrcehwa seer el otnhgi n- tgesr mC ocnagrree isns s cuor ua lndc ed. oT thoe yi nhc ae dn tti ov oi zl es lei lki ne gt aoxf bt hr ee as ke st oa on lds tcaoxucl dr egdei tt soautrt nh ea ti ri odni stpooas apll. aHc eo wwehveerre, nt hoemg oo dv -- eMrendmiceanrte acnodulMd edsiigcnaiidfi.cantly reduce the long-term costs of w in a g A r d M n d w e d a s i o s c t a t o r h e s e i m a g n r p o d l u y p M p e r fa e d c p i e c a a d r i e d a t h h co e a s r g d t o s . v t r e A u r n t n h d m : e t T h n h a t e t f ’ o s s o r w l s u t h t e i e a o r d n e i l g y w o i e i n n c g s r t e a fo a n s r d - - 1 t hPee pwr eRsei sdeeanrtc, hs tCa et en taenrd. Sl oe pc at el mp obl ei tri c1a9l , l e2 a0d2e3r. s“”Hhotwt p sA: m/ /ewr iwc awn. sp ev wi e rwe -C o n g r e s s , dseeanrtc-sht.oatreg-/apnodl-itloiccsa/l2-p0o2l3it/ic0a9l/-l1e9a/dheorsw/-americans-view-congress-the-presi-
THE ROAD LESS TAXED • 7 t p o r d o a g y ra , m fac s e . d with rapidly rising costs for key government health The Challenge Facing Washington Oc af rceo iunrssuer, at nh ci se .i sB au tb wo ohka ta bI ol euatr tnaexde sa si na ryeot iur ne mg Ce na pt , i nt ool t Hl oi lnl gs -t taef rf emr as et et ht ha te mb i eg ecthi na gl l esnt igl le hs oolnd tshter uheo rt iozdoany. :BOu ut re qguoavlel yr nomf t ee nn t, tchaenr eo’ sf t ne no easWy hweany Wtoaasdhdinregstosnthdeome.s come up with an answer, it often in- vWohl vaet sh agpe npeernast ii nn go umr onraet iroenv’ se ncua pe i tfar ol mmapt teeorps l—e l i k e y o u a n d m e . a lot — to savers ltihkaet ui sm. pS oa mc t se toi mu re ss ai tvmi nagtst. eSr os md iertei cmt leys: Ci to mn gartet se sr sp ai ns ds ei rseac tnl ye:wCloanw- ga rne es se dp af sosre hs ingehwe rs tpaexneds i ni ng , twh eh ifcuht ur ar ei s. eRs et ghaerddel ef iscsi t o, wf hh oi cwh cArme aetrei s- canYsefteeelvtehrey idmapyaIctm, ietemt astatveerrss. who are not fully aware of how Wm eaas nh si ntghteoyn’ ’rse dael sc oi s inoonts f uc ol luy l da wi ma rpea oc tf wt hheai rt rt he teiyr ecma ne ndto. At ondda tyh taot proTthecist bthoeomk saeimlvsest.o change that.
8 • BECKY RUBY SWANSBURG AND NEIL WILDING
The Impact of Washington on Your Retirement Ii nmga. gWi nheoy oa ruer ryeotui r ewmi tehn? t Wf ohr aat mwoi ml l ey no tu. Yboe udwo iankge tuhpa it ndtahye? mWo hr na t- g o aWl shdeon yI oi mu awgai nn et tmo ya cr ceot imr epml i es hn ?t , HI soewe dt hoeynoeuwf eheol ?b b i e s I w a n t t o ps euer stuhee (pf ienoapl ll ey pI lwa na nt i tn tgoasnphe enrdb rgeat ri rdeemn e…n ta wn di t hk e(emp yi nfgr iiet nadl isv, em) . yI cwhai nl dtrteonv, iasni td( f—i n ahl loypteafkuilnl yg! a—t r imp yt ogJraapnadnc)h. i l d r e n ) . I s e e p l a c e s I fed W W er h h a e e l n n g o m I v i o e m r s n a t g m o i f n e u e n s t m p a l y n a d n r e i f t t o s i r r p e o m o u l r i e c f n i u e t t , s u n . r I o e b t , e w o t n e t c h t e y a p t d ’ i s o c t a I r l u t ly h e i s n f t o k a r r a t y b o b o u y u , p t t l o t a o h n . e - nmi un cghf oi nrc ot hmi negws i wl l eI nceaend ct oonstur po pl . oWr t ht ahta tl ilfief es st yt yl el e d? oWIh awt adnot ?I nHeoewd t o sNaevxet ,t owdea yt htion kg eonf eerxatteer tnhaal tf oi nrccoe ms teh iant tchoeu lfdu tiumr ep?a c t o u r r e t i r e - mp reont et .cWt mh ay trwe tiilrl et mh ee nmt afruknedt ss ?r eWt uhrenr ?e Cwainl l Ii nstuecrceesst srfautlel ys gbreo?w a n d a n He coows ye svteerm, etvheartyi sdleacr igsei ol yn dwe tee rmmaiknee da bboyuWt raes thi irnegmt oe nn .t Ferxoi ms t st hi ne ri ceigeus l iamt i po an cs t si nugr ryoouunrdiinncgoymo eu rt or et thi er epmr oe gnrt aamc csoyuonut ’sl l t roetl hy eo tna xi np roel -- t a i r r o e u m n e d n . t, like Social Security and Medicare - the government is all H o Iu ss ep eunnt dme ry Ge ae rolryg ec aWr e.e rB ui ns hW, aa ns hdi nt hg teonn ,o wn oCrakpi ni tgo li nHti hl l ef oWr htiht ee speaker of the house and several members of Congress.
THE ROAD LESS TAXED • 9 WaTshhiisngbtooonk: is built on two principles I learned from my time in • Fmi rasdte, wi nhoeut rh enra twi oen ’ksncoawp i ti at l ocra nn ohta, vteh ae tdr ee cmi sei no dn os ubseiimn g- papacptrooanchth. e success — or failure — of our retirement • Ss teacnotnids , cihf at hnegree. ’Ts hoen ge ocvoenrsnt ma netni tn, pWoal ischi ei ns ,gat no nd , pt rhiaotr ci toi ens- omfotrordoawy.will likely differ significantly from those of to- This book will show you how to incorporate these two princi- pleWs ihneton yyoouur’rreeftiinreismheendtraepapdrinogaciht,. you’ll be better prepared for wk nhoawt el ve edrg e cthoapnrgoetse c lti ey o ua hr erae dt i.r eWmhe antt’ sf r ommo rt he e, iymo pu u’ l ll s ehsa ov fe C ot hne- gress. And that will help put you in control of your retirement, not WaAsshitnhgetopnro. verb goes: “A danger foreseen is half avoided.” So let’s take a look at what lies ahead.
PART 1
The Growing Government Problem in Your IRA
By Becky Swansburg
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CHAPTER ONE
The New Risk on the Block “I have wondered at times what the Ten Commandments would have looked like if Moses had run them through the U.S. Congress” ~ Ronald Reagan oozyoonue?remember the national panic over a hole in the In the 1980s, scientists confirmed there was a hole in ol auyre rp, l ao nf ec to’ su roszeo, ni se al na yeesrs edne tvi ea ll oppai nr tg oof voeur r Apnl taanrectt’ isc as .t rTaht oe s opzhoenr ee twhiat th ao bu st oi tr, bhsummuacnhs owf ot hu el ds bu en ’as t hf aa rr mh if guhl eurl trriasvki of ol er tsrkai dn i caat inocne. rA. n d p br o e u T a n h k d e d s c o ( u C w l F p n C r u i s t ) n , f d o c e h r r e t U m hi V i s c r a o a l z s d o i t n a h t e a i o t h n d o . e l es t rwoayst hc he loozr oo nf l eu ol aryoecra rwbhoennctohme y- l o e u a r B r n e c e f i o r d c r t u e h i 1 t is 9 b p 8 o r 5 a o , r p m d e s o l l s a a t n n o t d f w u s a s y s s h w t a e d i m d n e s e l y v t h e u a r s t e h d e p a o in r w d p e o r r o f e d C d u F s d n . Oo znocnees cl ai eynetri,s tCsounng dr eesrss t oa cotde dt h. eT hdea mEaPgAe iCsFs uCes dwreergeudl aotiinogn st.o Tt hh ee D o c C t u s s , r t b h h u a a t t i w r c s l e p e a s ra o n y o e
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14 • BECKY RUBY SWANSBURG AND NEIL WILDING CallleCanFCAsirhAadctbweaesnupphdaasteeddo. Aunt dofbuysteh. e middle of the 1990s, nearly 2 c sc h i a e N n n e g t w e is s t r , s i s s o o k b s d s a e o r r e v t h e e e d m i r e n i r s t g k h i s n e g w 1 a 9 e r 8 o f 0 a u s c n , e i d . t M u of s u t e e c v n h e t l r a i y k k e d e s a t y h ti . e m A o e n z d t o o a n u s e n o h d u o e r l r w e s t o t a h r n l a d d t hceorwtaoinulryatcrtuioe nwshteondasyavcianngifmorparecttioreumr leivnets. tomorrow. And that is Preparing for the Risks of Today — and Tomorrow Hp raoi rdsupcrtahyaframn se di nt ht he eo 1z o9 n8 e0.sTdhi edyn ’wt reer ae l fi zo ec ut sheedi r of na vtohrei trei shkasi rmc aa rke- i n gI hoef taednl i fni ne sd at ht et hsaatmt iemi se :t rl euaedf opra si na tv, epres rahpapprso, aacnhdi nl agwr ent di raermt se. n t . Tt hoedya ys’as vree:t i mr eaerskoeftt etnu pr br eupl eanr ceef,o rf orri s ke sx at hmapt laer, eoi rn trhi sei nnge wi ns twe rhei sl et re amt ee sr .g He oown ceev et hr , e tyh re eyt iarles .oAnnede dt hteos ep r“ es tpeaarlet hf or ri s tkhse” cr iasnk sb et hhaat rwd ei lrl to see. Where it All Began: Market Risk Tmhaer kf ierts tr emt uordnesr nc oruel tdi rhe amv ee not nr ias ks awv ea rs ’ smraert ki reet mr iesnkt, ao sr steht es . i Bmyptahcet 2 o fUCnliat sesd ISOt aztoens eE- Dn veiprloent imn ge nStuabl sPtraontceecst ”i ohnt tApgs e: /n/cwy .wJ awn. ue pa ray. g6o,v2/0o2d5s -. “ P h a s e o u t phaseout/phaseout-class-i-ozone-depleting-substances
THE ROAD LESS TAXED • 15 lpartoet1ec9t8)0ms,ymnaenstyesgagv?e”rs were asking, “How can I best grow (and C m o a n I n t s . i w d D a e e s r v o a m t e q y d u G e h r s u a ti s n o b d n a p n p a d a G s a t e n o g d e r g n fa e e t . r h a M e t r i y o . Y n G o s r u a d n t i h d d n p b ’ a a t s a G e l e b w o a a r ll y g c s e o h w a a c a v h s e ( a t g o r b o a u w s s k n y . mC oeanc hw! ”o) u. Al dv igdr re ee at dheirm. L ionv et hr eo f gar og oc eordy j os kt oe r. eA nwdi ti hm pa r sehs os iuvte os fa l“eHs -i mwoarnk. iInng ffaocrt,ahfuersnpiteunrtemreutcahileorf. his career in the 1960s and 70s i r n e g t O i r f n o e e m r r t e h e n i t n t ir g w e m t a h s e a n t c o t d . v i L d e i n r k e ’ e t d d m b e o y m s a a t n n s d u e c m h c i e p s s l a s o t f y t u e e l n r w t p i o o e r n n k , s e h i r o o s n w a . e t H v t e e h r e k , n w ti e m a w s e s , t h a h v a is - t wr ehg ea nr dhl ee srse toi rf ehdo, wh el ownogu hl de rlei vc ee di v. eBau pt eenvseino nwf ho irl et hme yr egs rt aonf dhfias t lhi feer, wt oacsh saenl gl ien. gI nf u1r9n6i t6u, rt eh ei nl atsht eS t’ 6u 0d se baankde ’r7r0osl ,l et hd i onfgf st hwe el ri ne ebs ei gni Sn onui nt hg BenNdo,wIn, dIiaknnao.w what you’re thinking: What does a Studebaker ht haovsee tSot uddoe bwaikt he r sr ewt i er er emUe nnti ?t e Wd Ae lul ,t ot hWe owr ko er kr emr se mmbaenrusf, aacnt udr ti nh ge Ug oAoWd bheandewf iot sr kaendd heaxrcde lfloerntthpeemn saitotnhpe lnaengso. t i a t i n g t a b l e . T h e y h a d s p i a o y B n t s u h , t e t h w b e h e y e n d n e i f s t i c t h s o e v t h l e a e r i e y d d - w o t f e h f r a e e t m o S w t p u l e o d d y e . e b T e a h s k e e b i r r e l g h a a o c n w k e c l d s o l o s le f u c p ff t r i i c o n i t g e e n s t t h t f e r u e ir n a d c p h s e e n t d o - tt hi ree mU .eSn. tC aI npci tooml , ea nS de c iunr i1t 9y 7A4c, t C(oEnRgIrSeAs )s , pwahs iscehd rt ehgeuEl amt epdl opyeene s Ri oen-
16 • BECKY RUBY SWANSBURG AND NEIL WILDING pe nl asnusr.eTthhee gs ouas tl aoi fn tahbiisl i bt yi lol fwtahse itroppernostieocnt sA. m e r i c a n w o r k e r s a n d lt ah teiHon o n e w s w o e f v E t e e R r n I , S a p A s u s w r h e e q b ’ u l e l i h s r e e a e m v i t o e h n r r t o i s n u l u g e h n d o e m x u p t a e t n h c y t i s e c d b o o r d p o ir o k e r , c a g t t o i i o v o n e n s r s . n I t m n o e t a h n b i t a s r n c e d a g s o u e n - , penTshioannksfaulltloyg, eEtRhIeSrA. also contained new regulations that allowed wt i roermk eernst tAo c cc oo nu tnrti,b” uot re Ii Rn At o. Cs oommeptahni ni egs clai kl leedd IaRnA “sI nbde icvai ud suea lt hReey- tt oi roekmtehnet .pAr ensds ue rme pol fofytehees cl oi kme dp aInRyA tso( apnl adn bf yo r1a9n7 8e,mt hp el oi ry et ae x’ s- dr ee -- ftehrerceodnctor iubnuttei ropnasrtthse, y4 0m1a(dk )ese) abcehcyaeuasre. t h e y d i d n ’ t o w e t a x e s o n f r o Hmo pweenvsei ro, nt sh et or eI wR Aa ss : aNn ouwn ,i ni tt ewn adse dt hceo ns as ve eq ru’ es nrcees pwoi nt hs itbhi el i tsyh itfot gurnodwerasntadndpraonteecwt trheetiirrermeteinret mrieskn:t mfuanrdkse.t Arinsdk. that led savers to l i k eMtahrokseet wr ies ke xips e pr iaernt ci ceudl ai nr l y2 0a0c0u taen dd u2r0i n0 g8 . mS uadr dk ee tn ldy o, iwt nwt ausr nu sp, tf uo nsdasv tehr rso tuog hn aa vl l i tghaitse t ug rr bo wu l ienngc ea n—d wp hr oi ct he cctai nn gb et heesi pr ercei at ilrl ye mh ae rndt to dToodoanyc,esyaovue’rrse rheatvireedd.eveloped strategies to address market rt oi sokl .s Mi natnhye israrveetri rs e lme veenrtaagpe par oma ci hx , obfa leaqnuciitni eg st haenidr pf ioxretdf o il inocso bmee- tt wi r eeme ne nt ht ef ut wn dos. Tt oh etyh ek nf iocwk l et hme ya’rl lk ne et eads ttoh eeyx paogsee, laensds ot hf et hy emi r arkee- adjustments accordingly.
THE ROAD LESS TAXED • 17 n d - r e tBi ruetmi te nt ut rrni sskotuhtatthsaatvgerroswwianngtytoouardndersetses .g g i s n o t e n o u g h . Y o u also have to make that nest egg last as long as you do. d p e ro r Y s t o e ta u c n t ’d i d n b g t e h t e h h a e im r ir d p - r o p e r r t t e i a r s e n s m c e e d e n o to f t m f f i u n a n d r d k a s e . m t I p t o ’ e s d r e p f r o r n r o m b sa a a v b n e l c y r e w t t h o h e o g b r d e o o s w e t- s i k n n n g ’t o a u w n n Up Next: Income Risk Twhoer l nd ewx ta sb ii ng croi ms ke t roi sekm. Pe er gnes i of onrs Uh .aSd. sgauvaerrasn ti ne etdh ea fpi xoes dt - pa emnosui onnt oh fe iwn coouml de rfeocre liivf ee : aNpoe mn sai ot tne rc hheocwk lf or onmg mh iys Gf or ramn de pr ae mG epol or gy ee rl .i v e d , I R AB ua tn dn o4w0,1w( ki )t ha mc coosutnrt es ,t itrheemr ee nwt aws ena ol t hg us aa rvaendt ei ne tyhoeusre mn eown eeyr wt i oonu ltdo laa snt eaws lcoonngc earsny: oi nu cdoimd .eArni sdk ,s oo ,r stahvee rr iss kt uor nf eodu ttlhi veiinr ga tt ht eeni r- funTdrsu. th be told, this wasn’t a new risk. For centuries, humans hc oa ud l db eneon lcoonngceerr nweodr ka .bEo vuet nh ot hwe tRo osmu satna iEn mt hpei rme sieml vpel se mw eh ne tne tdh ae ny amnennut atlhpa at yl ams teendt ffoorr lsi foel .d(iTe hr si sapf taeyrmt he ne itr, csaelrl ev di c ea ne “nadnendu —a s , ”a i sp aa yc -- tpur aoldl yu ct ht et hraot ootf toefnoguur amr aondt ee er ns -ad sa ey t wi nocrodm“ea na nmuoi ut yn, ”t faonr ianss luornagn ac es you live. 3 ) 3 nuDiitcytionary.com. 2025. “Annuity” https://www.dictionary.com/browse/an-
18 • BECKY RUBY SWANSBURG AND NEIL WILDING d p r le a T . w o M a d l a a s n y t , y r m a t h a e a n g v y i e e s s a t t u v h e r a n r t s e a d a i d m t d o t r o e v s p e s r h i e n i s c c e l o e r m s v e e l i a r k i c e s e k r t . t h S a e o in m R a e o m m m o a a u n y n - h t c a o o v f n e p c e r w i i n v it e c h i d - - af onrn lui fi et y. Mt oo smt isma vi ce rpse nn os iwo nu pn ldaenrss taanndd gt hu ea yr annet ee ed tt ho egme naenr ai tnec op mr ee- dc oi cmt aebtlhe e, ldoenmg -ilsaes toi fnpg einnsci oomn se a icnr orsest isroe mmea nn ty. iInt ’ds uas t wr i ea sy. t o o v e r - But is it enough? Today’s Emerging Risks I guess you could get by only addressing the risks of the past. But t h aMt wo sot uol fdurse, qouf icroeuyros eu, taor en ol ot obkei nr ge ttior et hd ei nf utthuer ef u. Wt u er ek. n o w r e t i r e - mt o emnot ri rsoawl o, nnogt- tj eu rsmt t he en dr iesakvsoorf. tSood wa ye. Wn ehe adt taor ef otchues eomn etrhgei nr gi s rki ss kosf of tIobmeolirervoewthwee bniegegdestto oandedrceosms?es from Washington. If left un- ao df dmr eo snseeyd ,yiot uh acsa tnh es ppeont ed nitni a rl et ot i rderma me na tt .i cIat ’l sl y ar er di sukc et ht ah te iammpoaucnt st nite. aItr’slytehveerriysksaovferris, iynegt mtaoxests.of us have not taken steps to address p l aTnanxe dr i. sTkhi iss tshcee nr iasrki oy omueratnasx ems owr ei l lobf ey ohui gr hi ne rc oi nmree itsi rgeomi negn tt ot ht ha ne IsRpSe,nadn. d less of your income is going into your bank account to t a xCe os ni ng rreestsi r iesmceonnts. tAa nn dt l ys ocmh aenogfi nt hgotsheec hr ua lnegse ws choeunl di tnceogma tei vs etl oy impact your retirement approach. There are many ways Congress
THE ROAD LESS TAXED • 19 cwahna ta di sj ut asxt etdh, ewlhe ev ne l i ta’ sn tda xs et rdu, chtouwr emouf cyhoiut ’rs tt aa xx ee sd , iann rdeftoi rrewmheonmt : it’sTtoaxdeady., no saver’s retirement approach is complete unless they ha lal ,v et a ixdeesnat irfei etdh, eq ud ai fnf et irfei endt i, aat on rd bbeetgwuene nt o haodwd rme susc tha xi nrcios mk . eAyf toeur gs pe ne ne rda. tPeaiyn troeot i mr eumcehnitnatnadx ehso awn md uy oc hu ’il nl cboeml eef ty owui tahc tt ou oa l ll yi t tgl ee t i nt o- comIfey.ou haven’t addressed tax risk in your retirement approach, di nocno’rt pwoor ar rt ey . tTa xh ips rboot eockt iios nf oi nr tyooyuo. uTrhrreotui rgehmi te, nytosut’rl la tl eeagryn. h o w t o Y o uA’ nl l dl ei af ryno un ’evwe awl raeyasdtyo bs ea gf eugnu taor da dy do ruer srsettai rxe rmi sekn, tkfereopmr el eagdi isnl ag-. tdirveesscihnagntgaexs.riDsoknc’atnlehteWlpapsuhtington control your retirement. Ad- you back in the driver’s seat. Let’s dig in.
CHAPTER TWO
21 • 401(k)s. • 403(b)s. 4 r eAt ni r eo mv eernvti eaws s oe tf si ns faovremd ai tni oena cohn arcectoi ruenmt et ynpt ea cc caonubnet ft oy up ne sd aant d“ Aammeorui cnat no fRUe -. S . 2 r ti e 0 r t e 2 ir m4 e . e mA n e v t n a a i t n l - a s d b a T l v e a i n o x g - n P s l - i r n a e c e f c e h o r t r u t e n p d t s s : S / / a / vt ianxgf os uAncdc ao tui no nt s. o, ” rTg a/ xd aFtoau/ na ldl /a ft ei odne, rAa ul /g4u0s1t k1-4i r, a - T But Will it Impact ME? “People who complain about taxes can be divided into two classes: men and women.”~ Unknown hp er e sr si si nk g orf e triirsei nmge nt at xrei ss k m. Wa yh yb?e I to aulrl cgoemn eersa tbi ao cnk’ s t omtohset way we save and, more importantly, the way we have scaovmemd oinntthaexpsatastt.uRseetsi.rement savings tend to fall under one of two 4 Tax-Deferred Saving Tr eht ii sr ea mp pe rnot a, cahn di s Ib’ my f awr i lt lhi ne gmt oos bt ce ot ms ommoen owf ayyo Au rmsearvi ci na gn ss sa ar ve ei nf o ar tax-deferred vehicle. What’s a tax-deferred vehicle? • IRAs.
22 • BECKY RUBY SWANSBURG AND NEIL WILDING b $6 u , t T 0 io h 0 n e 0 . m f S r o o o n m if e y y y o o i u n u r s t a h t v a e e x s d a e b a $ l c 6 e c , 0 i o n 0 u c 0 n o t m i s n e i a s . n T n o I h R t e A t m a t x h o e n i d s e y a y e t i a t n c c i t - - cy oo uu npt as yi st at ax xe es di nwr he teinr eymo ue na tc oc ensbs ot thhe yf uo nu rd sc oi nn trrei tbi ur et imo ne ns ta, nmd eaal nl ti nh ge associated growth of funds in that account. Tax-Free Saving h r , t e a y t x o i - m u d e e ca f o e n f r r d c e o e d n d t u a r Twhei’ sl l aepxpprlooar cehi ins gt ha ii sn i bn og opko. pTuhl aersiet yawc ci tohu mn tas n, ywshai vc eh r si n, fcol ur dr ee aRs oont hs ItRa xAesd, Rd iof tf ehr e4n0t1l y( kf)rso, ma nt rda ds oi tmi oen atlaIxR- fAr es ea ni nds4u0r a1n( kc)es .p r o d u c t s , a r e d o lIlna r tsa. xS -of ri ef ey oauc cwoaunntt st o, yt aokue mt haakt es acmo ne t$r 6i b, 0u0t i0o ny so uwpi ut ht i anf taenr -I tRaAx af inr sdt iannsdt etahde np uc ot ni tt ri inbtuot ea wR ho taht ’ sI Rl eAf ,t . yHoouw’ l lehv ae vr ,eotnoc ep af uy ntda sx easr eo inn iat tyaoxu- f ur es ee at chceo umnot n, tehye ya sn er ve teirr eg me t et na xt ei nd caogma ien, . oI nr twh eh ef unt ut hr ee —a c cwohuennt passes to your heirs — no additional taxes are due. 5 And that’s truDe efospr iyteo utrhecoonptrtiiobnusti oavnasialanbdlea,llththeemgraojowrtithyinofthaell aUc.cSo. usnavt.ings dollars are housed in a tax-deferred vehicle. 6 This approach is the p r i Imt ’ as rcye rwt aaiyn Al ymt reur ei cfaonrsmh ea vaen ds amv eadn yo voef rt ht he ep pe oa sptl ef eIwk ndoewc a. dI ehsa. v e money in an IRA, and money saved in a Thrift Savings Plan (which 5 haRsobtheeIRnAopdeisntrfiobruattiolenassatr5e ytaexarfsr.ee once you reach age 59 ½ and the account 6 h tTt apxs :P/ o/ tl iacxypCoel inc tyecre. nJ at enru. oa rr gy /2b0r 2i e4f .i n“ Wg - bh oo ouks/ews hi nod- ui vsi edsu- ai nl dr ei vt ii rdeuma le- nr et tai rcec mo uenntts- ” accounts
THE ROAD LESS TAXED • 23 issavliiknegsaagsowveerlln. ment 401(k)). I bet you have some tax-deferred o f f eTrhseirgen’ si f ni coatnhti nb ge nwerf oi tns .gBwuitt ht hIeRrAe ’ss asnodm4e0t h1i(nkg) sm. Iannfya cotf, ut hs edyi dcna n’ t raet eadl i zaehwi ghhel yn twa xe- sseanvseidt i vi ne rtehtei rseemt aexn-tdfeofre roruerds eal cvceos u. n t s : W e c r e - t a xWe shienn tyhoeuf us at uvree i nw ai l l 4b0e1 (l ko )woerr ItRhAa n, ytohue ymaarkee tao dbaeyt . tAh fatte ry oaul lr, tahtaat’lsowwehryryaoteu’irnerdeetifreermrinengty. our taxes — to hopefully pay them r e t Bi ruetmt he ne rt ef u’ snadcsaitnc ht h. Be ef uc at uu rsee, yt oh ue ’ av me aogurneteodf ttoa px easy yt aoxue’ lsl opna yy oi su–r unknown — and entirely dependent on future tax law. Which mtuereantasxycohuarnrgeetsir. ement income is particularly susceptible to fu- m yMt aaxneys oafc ut us ahl layv be ne ’ ltoswt oepr pi ne dt ht eo faustku ar en ti hmapnotrht ea yn ta qr eu et os tdi aoyn?: WW ii ll ll deferring all these taxes pay off for me? Retirement Reality M yMpya rfeant ht se hr ai vs eabneaecnt ua sakr yi n(gt ht haet ’sse aq umeastthi oenms artei ccea nl telxyp. e r t i n t h e a( trheaat ’ os fa nr i sekx paesrsteisns tmh ee nuts)e. Mo f yl amn gout ahge er ) .i sA sa yloi nugcuai ns t ii mc sa gpirnoef e, hs saovr- iwnigt ho nl aenpg auraegnetmo ba ds eesfsoerdawn iitnht enruems tbi negr sc ha ni l dd hoonoedp. a r e n t o b s e s s e d
24 • BECKY RUBY SWANSBURG AND NEIL WILDING s h aBr ue td do ensepti ht ei nmg yi n pcaorme nmt so nh. aTvhi ne gy bvoe trhy sdaivf feedr ef no rt rceatri er ee rms ,e nt ht ei ny taxT-dheefye’rrreendoatcacloounnet.sA. s I mentioned, the majority of U.S. savings dollars are saved in qualified plans. 7 t w io h n M il a e y l w s p a a o v r r i e n k n i g n t s s g a , s d s a v i v n i e c c d e e : i y D n o o t u n h ’l ’ e t l i p r b a e 4 y 0 i n t 1 a ( x a k e ) h s s i o g a h n n e d y r o I t u R a r A x r s b e b t r i a a r c s e k e m d e e t . o n P n t a a t y s r s a t e d h t i e s - taxAesndinthreattisreeemmeendt, loiknecegoyoodu’arde vinicea tloowmeyrptaarxebnrtasc. Ukentt.il they saw rheatdirne’tmreenatlloyncothnesidhoerreizdon. My parents — like many savers — how they would get into a lower tax br er aa lci kz ee dt i nt ordeat yi r’ se ms yesnt te. mA nodf ot anxc -edtehf ee yr rsetda rst ae vdi nt hga wt eavsa al uc at ut iaol nl y, tchreey- a t eLdefto’ sr gpoa sbt agcekn et oramt i oynGsr, annodt pf oar Gt he oo srgeeo, ftthoedfauyr. n i t u re s a l e s m a n . HG reewa taDs epparret sos fi ot nh ,ef oGur ge ha tt ei snt WG eonr ledr aWt iaornI, Iw, ahnod gcraemwe uhpo md uerti on gs ttahret fwa hmai tl i me sa anny dc oc au rpel ee rs so. fWt hhee nG rheea taensdt Gmeyn ge rr aa nt i do mn ad i rde: t Ti rheedy, tdhreaymdaitd- icaTllyhetiyghsttoenpepdedthteriarvbeulidngge. tT. hey sought out early bird specials. Tn ahtei yv essw. Ii tnc hs he do rftr, ot mh e yn al imv ee d- bar asnmd agl lreorc lei rf ei e isn t or est it roerme -ebnr at . nAdnadl tbeer -- cg ar ou cs ee rtihe es y, twh ee yr ewn ’et rter aavbel lei ntgo agnedt ebayt iwn gi t ho ul et sasn di nbc uo ymi ne g. Seixnpceentshi ve ey 7 “ QI nuvaer st et mr l ye nRteCt iorme mp ae nn yt MI nasrtki teutt eD. aSteap, St eemc obnedr Q1 8u ,a2r t0e2r52. 0D2e5c”e m b e r 1 9 , 2 0 2 4 . https://www.ici.org/statistical-report/ret_25_q2
THE ROAD LESS TAXED • 25 cbor aucl dk egt .eTt abxy- d ewf ietrhr elde sssa vi inncgosmweo, rtkheedy f omr otvheedm .i n t o a l o w e r t a x b a bByu tb no oo wm el er ts’.s Agnodb al ickke tmo mo syt pbaarbeyn bt so. oBmo renr si n, t1h9e 5y 0d, ot hne’ tyw’ r ea nbto tt ho lpi va er ean st smwa lal enrt ltiof e mi na xr ei mt i ri zeemtehni st . nAeswt hpehy aaspepor fo at hc ehi rr el ti vi reesm. Te hn et ,ym’ r ye pt hl ae nnnei wn gr ee sl at abuo rr aa nt et s v. aTchaetyi o’ rnes t. aTkhi ne gy ’ ur ep gnoe iwn gh oo bu bt iteos , dl ii kn en eg ra radt eanl -l icnagu.sTehtheeyy’r’erenroettiwreidll.ing to sacrifice their quality of life just be- t o qWu hi ei tl el yt hwea gi tr eo auttetsht egi er ne enrda toi fodnaayps p, trhoea cbhaebdy rbeot oi rme me resn—t a sa na dt i tmh ee go ef nhearradt iwo no sr kt haantdf oglol oowd s—a vvi ni egw. Arnedt i rt eh ma t e’ sngt raesa at ! rWe we awr da nf ot rt hyee ar res- waBrdutoft haerreel’asxai ncga, tecnhj:oIyfamb lye preatrierenmt sepnlta. n t o ma in t a i n t he i r li fe - sl et vy el el oi nf i nr ceot imr eem. Ae nndt , i tf ht he ye ’yl lmaal si no t anienetdh et ior gmeanienrtaali nl e vt he leoi rf ignecnoemr ael, ca hraens cuel ts, amr ae nt yh esya ’vl le mr s aai nr et adi ni s ct ho ev ierr gi negn et hr ae li rt at ax xbersa mc kaeyt na so twbeel l s. iAgs- nt hi fai tc amn et laynlso wt heer ti anxreest itrheemy ’evnet dt he af enr rwehdeinn t thheeyi rwI eRrAe swaonrdk i4n0g1. A( kn)ds may end up being paid at higher rates than they planned.
26 • BECKY RUBY SWANSBURG AND NEIL WILDING
And Then Washington Gets Involved Bpluettem. y parents’ assessment of their retirement taxes wasn’t com- wa L y i s k e t hme iarn tyasxaevs e cr so,ut lhde yc hwaenrgee p. rHi mo wa r iml yuf cohc ui snecdo mo ne t hweo pu el dr s tohneayl nt heeemd ? bWe owu lidd ot hweeydb ae nf di l i npga yj oi ni ng t ltya, xoers aat ts ot hmee hpiog ihnet rwsoi nu gl dl eo- fni lei nogf rat A e? s I mentioned at the start of this book, all these personal de- coifs hi oonws emxui scthi nmaonn eeyc oms yyspt eamr e nc rt se astpeednidn oWr as sahv ien, gWt oans.hRi neggtaornd lhe as ss tchoen sf ti na na lt lsya cyhoann gt ihnegi rt ht aexr ul el ve es l wi nh erne tiitr ecmo me ne ts. tOoutra xgeosv earnndmreent itr ei s- macecnotu.nAtn. d those changes can have a direct impact on your bank A Silent Partner in Your IRA I4f0, l1i k( ke) t, hyeo umhaaj ov rei tay soi lfe anltl pAamr tenrei cr ainnsy, oyuo ru ’rveet i sr ae vmeednitna ac nc oIuRnAt . o r a WThheoIRisSt.hat silent partner? DI’mona’tsbmelailelvbeumsien?ess owner. Perhaps you are, too, or you have ap lfirciaetnedd o(ra fnadmei lxypme nesmi vbee) r, swohmo ai sn. yR ub nu ns ii nn egsas bouws ni neersss hcaavnebae pc oa mr t -- ner.
THE ROAD LESS TAXED • 27 b u sLiente’ ss sd. oI na ftahcotu, gyho tueoxwp enr 2i m0 epnetr. cSeanytyoofum’ r ey ac opma rpt na ne ry .i nA mt tyh es me na ldl oy of ue a2c0h pyeeracre, nats oI ft tahkaet ap rpor foi ft i. tAffrtoemr aml l ,yycooumopwann y2,0I pkenrocwe nIt’ lol fomw ye comBpuat nleyt.’s say this year you come to me and demand 30 percent oI tf wmoyu cl do mp rpoabnayb’ sl ypbr eo fsi ot . mWeht ha itndgol iykoeu, “tGhei nt kl oIs’ tm. ” g“ Iodi nogn ’ttot ht ei nl l ky soou. ?” Ok nr oswi mypol uy , w“ Na on .t” 3M0 apyebrec ei fn It’ mo f fteheel i np gr oef ixttsr. aB nu itc ye ,o uI ’ do ns al yy , o“wHne y2. 0I p p e la r n c n en ed t . o ” f the company. So you’ll get 20 percent of the profits as IBtu’stjhuesrtec’osmsommoenthsienngsey.ou might not have considered. If you’ve sy aovuer dr ef toi rr erme tei nr et mb ue snitn ei ns sa. T4h0a1t (pka) r ot nr eIrRi As ,t hyeo IuR hS .aAv fet ear pa lal r, tt hn ee rI Ri nS ga ertesaal spei encsee ,oof we vne pr ya rdt ool lf ayroyuorur we t ii trhedmr ea nwt farcocmo uynotu. rA InRdAt. hTehIeRyS, iins a p Iaf ryt no eu rr tt ha ax te sc acnh ac nh ga en, gteh iet sI RoSwcnoeurlsdh si pu ds tdaeknel ya to awnny at i lma reg. e r p o r - tI Ri oSn mo fa yy oouwr nI R2A0 tphearnc eynotuo pf lyaonunre IdR. AA, nadn dt hna et xmt ey ae na rs tt hh ei s I yReSacr o, ut hl de oabwonut3i0t. percent of your IRA … and there’s nothing you can do c w h a a I n n t w g y e o o u h u l i d s to o n a w e c v n c e e e r p r s t a h i c t ip c i e n s p t y t a o k a u e r p w r a e i r t t t i h r n o e e u m r t e i m n n t y m a p p y e p r b r m o u a i s s c i s n h i e o , s e n s i . t h A w e n h r d . o I c d o o u n ld ’t
28 • BECKY RUBY SWANSBURG AND NEIL WILDING
How Much Will This Partner Take? retTirheemreenatr:e only three things that can happen to your taxes in • They can be lower than they are today. • They can be the same as they are today. • They can be higher than they are today. s c eTnha er i no es xi ts flei kwe lcyh taop tbeer st rwu ei l lf oh re lypoyuo. uWdheatte ramr ei nt he ewchhi ac nh coefs t yhoe us er IvReAnt’sitpfarrotmnehr awpiplleinnicnrge?ase its share? And what can you do to pre- w eA’ l ls ewv ea l ue xaat emAi nme etrhi ec af’as cttaoxr setnhvai tr ohneml pe annt siwn etrwtoh edsi es t iqnucet swt i oany ss ,. FA inr ds t s, ewc ho an td a, hr eo wt h cea lno nwge- tl ee vr me r at ag xe tt hr ee nsdhso rwt -et enreme dt at xo eunnvdi re or sntma ne dn ?t to pTrheipsadroeufobrlethaepmpr?oach is important. While I don’t know you ponerlysotnhealnlye,xIt ffeoeulrsyaefearass. suming you don’t plan to be retired for to tWhihneknawboeuctonthseidiemrmtheedriaistkescchoamnginegs from Washington, it’s easy this administration or this Ct eonn, gt wr eesns tmy ,i gt hhitr itmy , polre emveennt .f oBrut ty yyoeua’rl ls l. iWk ehl yi cbhemr eetai nr es dwf oe rc tahne’ tnj ue xs tt el ovoakl uaatt et hteh el o rnigs -ktse rcmo mt ri ne gn dosu at nodf Ww ha as ht itnhgetyo nc otuol dd amy . eWa ne f no er eydo ut or retirement down the road.
THE ROAD LESS TAXED • 29 t o mLoe vr reorwa g. eI tt’hs eat asxmcaordt ea opfp trooda ac hy , t aonpdr etphaer ec hfaopr ttehres taahxecaodd ew oi l fl show you why.
CHAPTER THREE
31 - - Congress analyze various budget and economic issues. A We’re in Trouble “I could end the deficit in five minutes. You just pass a law that says that anytime there is a deficit of more than 3 per- cent of GDP, all sitting members of congress are ineligible for reelection” ~ Warren Buffett sc eyronue’ dv ewpirt oh btahbel yr igsakt hoef rrei sdi nb gy nt aoxwe s, .I ’ Amnidn cyroeua ssihnogul yl dc obne-, too. To convince you of this, all I need are some good, old- fgaosvheironnmedengtorveepronrmtse.nt reports. Yes, government reports. I love Okay, I don’t love government reports. They are dense. They oB fut te nt hceoynat raei na ldsios tfri lel sesdi nwgi tnhe vwasl .uTa hb el ey i cnaf on r hmuartti oyno u—r ei ny es isg thot sr et ha adt. ca ahne ahde. l pA nAdm epreirchaanps sl i kn eo ygoouv ea rnndmme en tb er et tpeor rpt riesp ma roe rfeo ri mwphoart tlai enst tahnadnstpheenCdoinngg.ressional Budget Office’s annual report on revenue n m y i m s T t h s , , e C b B C u O o d n ) g g i e r s e t a s a s n n io o a n l n y a p s l a t B s r , u t i d d sa g e n e m t s o O u g f p r fi a p c p o e h r ( t e o r s f s t e , e r n a v n i r c d e e f e e m r n r a g e d i d n e e t u o e p r b s a o e c n r lp y o . f i I t t e s c h o o s
32 • BECKY RUBY SWANSBURG AND NEIL WILDING Ewsisllehnetilapllayn, aiflyCzoentghreeisms pisacdte.bating a new spending bill, the CBO a fi c s c c A o a s u l n p ye t a a r o t r f . ogfoivt se rmn mi s seinotn r, eevaec nh uyee aarn dt hsepCeBn Od i np gu bf rl iosmh etshae cporme vpiloeut es 8 It’s basically an overview of our government’s fiscal h tr e e a n lt d h . . And in recent years, the report has revealed a concerning Let’s look at that trend — and why it matters to you . The State of U.S. Revenue & Spending Fa ni raslty, zt ehde “( gF oYo2d0”2 n4 e) ,wosu. rI ng ot hv ee rmn mo set nrte tcoeonkt fi ins c$a4l . 9y etar ri l ltihoen Ci nB Or ehvaes- nyouue.aJnudstIobvoetrh hpaalyf.of that was from the individual income taxes $N4o.w9 ,trIihllaiovne. fourteen-year-old twins, and one afternoon I was cr or uo nmc.hMi nyg dsaoumg he tgeor vwe ar ns mr eeandti nngu bmebs ei dr se mo ne tahnedcloouockhe di no ov ue rr tl oi vsi ne eg wh“aWt Ihwata’ss $d4o.i9nTg.mean, Mom?” she asked. hadI reaxipsleadinleadstiytewara.s how much money the federal government me“nWt ioswri!cThh!”at is so much money,” she responded. “Our govern- 8 Y eCaorn 2g 0r e2s4s”i ohnt at pl sB: u/ /dwg ewt wO f. cf ibcoe ..g“oMv o/ np ut hbl lyi cBaut idogne/t6R0e8v4i 3e w/ h: tSmulm m a r y f o r F i s c a l
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THE ROAD LESS TAXED • 33
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u th n t ktonoo.ws, it’s not just the revenue that matters. It’s the expenses, l o oIk ci na gn ’at tt ewl lh iaf t yyoouur tfaakme i il ny ei sa cohn yset raor .nIg hfai nv ae ntcoi al ol of okoat ti nwg hj ua ts ty ob uy s p eOnnd tahsews eplel .nAdni ndgi ts’ isdneoodf itfhf eer el endt gfeorr, ot hu irnggosvbeer cnommeen tv. e r y i n t e r - esting. e e n l d n The State of U.S. Spending F i r Ts th, el er te’ sa lroeotkwaot phroi wm at hr ye fgoorvme sr nomf geonvt ecrannmael lnotc sapt ee ni tds i fnugn: ddsi s. c r e - t i o nDai sr cyraent ido nnaorny- dsips cernedtiino gn arreyf e( rs so mt oe ttihmee ss pc ea nl l de di nmg aanpdpartoovreyd) . b y Cg roensgsr pe sass seeasc ht hyreoaurg. hT haips pf ur on pd ri ni agt ii on nc l ub di l el ss (bt oo t fhu tnhde tshpienngds i lni kg eC on na -- tsiuopnpalle md ee nf et na ls es p ea nn dd i n tgr aCnosnpgorretsast i op na s siensf rua ns tdreurc toutrhee)r sapnedn dai nn yg b i l lNs o( lni k- dei st hc reeItni of lnaat iroyn, Roerd umcat inodnaAt ocrt yo, r st hpee nCdAiRn Eg S rAecf et )r.s t o t h e spending our government outlays each year outside of the legis- lma tei nv et s p or ou cr e sgso. vMe rannmd aetnotr yo ws peesn dt oi n gi t se ncci ot imz epnass, s ea ss aml l atnhde aet ne dt i t lbey- cfiutsr.rent law — things like Security payments and Medicare bene-
34 • BECKY RUBY SWANSBURG AND NEIL WILDING b e cNoomwe, s I ak lnaoww. Hy oo wu edvi de rn, ’ tt hpei cdki fuf epr et hn its s bp oe on kd i tnog l ceaatreng ohroi we s ambaitl -l tiderenatlotot bimecpaluemseetnhtecyhiamnpgaecst. the ability of Congress and the Pres- oveSroalllebt’usdlogeotk. at each category and its impact on our country’s Adding Up the Numbers Mandatory Spending It no rFyYs2p0e2n4d, itnhge, fperdi emr aa rl igl yo vt ehrrno mu gehn tt hs pe eSnot c$i a4l. 1S et rciul l ri oi tny oann dm Ma neddai -- creaqreuirperdogtroadmisst.riTbhueteseunadreergcouvrerrennmt leanwt. benefits our nation is t e r Ae sdtd pi t ai oynmael lnyt, st hteo gsoevrevri nc em eo nu tr s fpeednetr aa nl odtehbetr, $w8 h0 i0c hb i li lsi oanl soon ri ne -- quiArelldinunaldl,eorutordgaoyv’esrlnamwse.nt outlaid around $4.9 trillion on man- dat$o4r.y9 stprielnlidonin. g. DInoFyYo2u0s2e4e, tthhee pgroovbelrenmm?ent collected $4.9 trillion in total rev- enuAen.d before Congress passed a single piece of legislation, our government had already allocated all of those funds to mandatory spending requirements. Every single penny of them.
THE ROAD LESS TAXED • 35 Discretionary Spending Oa rf ocuonudr steh, et hCi sa pwi tooul l da nn d’ t bn eo ta sppr eonbdl e amn yi f Cmoonngerye st sh ewmo us el dl vjeuss. t Hh oa wn g- ea vpeprr,otphraita’ st ecdl eaanr ol yt hneort $w1h. 9a tt rhial lpi opne ni ns . sIpnefna dc ti,nign. F Y 2 0 2 4 , C o n g r e s s s p eNnodwi n, gi tt’ so oe ams yu ctho mp ooinnet ya! ” f (i nI gseormaett iCmoensg rpeosisn ta nt hda ts af iyn, g“eYro um’ rye- sc el ul fd. )e sB ut ht i wn ges ml i uk es t mr ei ml i teamr yb earn dt h adte fceonnsger esspsei no dn ianl gs, paesn dwi negl l ians- invWeshtmichenitsstion sraoya,ds, bridges, and other infrastructure. some Congressional spending will always be ns pe ec ne sds $a 0r yf.o Ar nt hdi ni ng s ot uo rb ac ul arnr ce en to ubtu. dOgbevti, oCuos nl yg, rtehsast ’ ws nooutl da rneeael di s ttioc goal. Total Spending A l l Ni no, wo u, Ir’ mg o vg oe ri nngmteon at ssspuemn teai ft oytoaul ’or fe $r6e. a8dtirni lgl i ot hni si nbFoYo2k 0, 2y o4u. ’ v e ci nogmopfl et ht ei nd gesl el mi k ee natda dr yi t si oc nh oaonl dmsaut bh t. rYaocut i oh na v. eI f aoguor ogdo uv ne rdnemr set annt di s- goeuntlearyast,itnhge$re4.i9s atrgilalipo.n in revenue and spending $6.8 trillion in AA b$1ig.9gatrpil.lion gap. a n dT hwaht a$t 1i. t9 stpr ei lnl idosn i gs aopu rb eatnwneueanl dwehf iacti to, uarn dg oi vt ’es r nn omt eunnt i qmuaek et os FY2024. Since 2020, our annual federal deficit has ranged from a
36 • BECKY RUBY SWANSBURG AND NEIL WILDING low of $1.3 trillion to a high of $3.1 trillion. 9 In fact, it’s been npeaacerldyitasqeuxapretnedritoufraesc.entury since America’s revenue has out- d e bAtl lt ot hai shei sxttor rai cs phei gnhd ionfg$h3a8s tar ni l l ii mo np aa nc td. Ictohuanst idnrgi v. e n o u r f e d e r a l 10 The Impact on Today’s Savers Ot aki na ya ,b$l e3. 8B turti ltlhi oi sn i iss aabl oo ot ko fa db eobutt. pArnodt etchtiisn lge yv oe ul or fr de tei br et mi s ennot tf rs ou ms - WaSsohiynogutomni.ght be thinking: What does the debt have to do with mmyenrtetciarne’mt benalta?nWceililtIsrbeoaollkysb?e impacted just because our govern- IBtudtotehsearell’sseaermeaasolinttlIe’v…e ienscoltuedreicd. it in this book: Our nation’s si npceonmd ien. gApnrdo bt hl eemr ecaosuol nd hwahvye ias dl ei rses c at bi mo upta ct ht eo ni my ob ua lra rnectei r ienmtehni st efiqxuita.tion and more about the options available in Washington to
9 h tUt p. Ss. :T/ r/ef iasscua rl dy aFt ias. ct rael aDsautray. . “gWo vh/aatmi se trhi cea ns -afti inoannacl ed- eg fui icdi te?/” n a t i o n a l - d e f i c i t / 10 US Debt Clock.org. https://www. usdebtclock.org. Accessed November 11, 2025.
CHAPTER FOUR
37 mary ways to fix it. So how can our government close the trillions-dollar gap each year between revenue and spending? 1 | Reduce Mandatory Spending Ol i knee Swoac yi a lt oS ebcaul ar int cy e, Mt heed ibc ua dr eg, eat ?n dR eMdeudciec asipde. nTdhien gf a oc tn i sp, r mo garnadmas- teoxrpye ns pdei tnudr ien eg aacchc oy ue na rt s, af no rd or ue dr ug coivnegr nt hmi se nt yt p’ se l aorf gsepset ncda itne gg oi sr yt hoef q u iBc uk et stth, ims oi ss tedxitrreecmt eplayt hc ht oa lal ebnaglianngc et od db uo .dAg entd. t h e r e a s o n i s n ’ t politics, it’s math. A Can We Fix Our Broken Budget? (And Why the Answer Matters to YOU) “Nothing is easier than spending the public money. It does not appear to belong to anybody” ~ Calvin Coolidge smwa tei csaalwl y i nu nt hb ea l laans ct ecdh abput de rg, eot u. rA gnodv et hr ne rme e anrt ef atcherse ae dprrai --
38 • BECKY RUBY SWANSBURG AND NEIL WILDING e g oAr si eysoaur emSaoyc irael cSael lc, ut rwi toy oa fntdh Me leadr igceasrte m. Aannddtaht oo sr ey ps rpoegnrdaimn gs cpar ti -- mp raorbi ll ye mb eanrei sf ietscbi tei zc ae un ss ea Ag emdesr ii xc tay’ s- fpi voep aunl adt ioolnd ei sr .r Aa pmi dal yt haegmi nagt .i c a l t h aCni ttihz ee nt so taagl ep soipx ut yl a- ftiivoen ,a ancdc oorl dd ei nr gg rt oe wt hne e2a0r l2y0f icveen st iums .eAs rf oa us tnedr on ni f ei c iann st iixn cArme aesrei cfarno smi s1 n0 o0wy eaagres saigxot y, -wf ihv ee na snednoi ol dr se ra. cTc ho autn’ st eadsfiog r- less than one in twenty Americans. 11 t e i r o a n T t i h r o e i n s a s c g , h r r o i e n w t g i t r r h i e n , t g o i r f b e c m a o b u e y r n s t b e a o , g o is e m . d A e r r s i s v o e h n n a e v b o e y f o d th u r e i r v b c e o a n u b u n y p t b r y o th ’ o s e m l a n e r u r g m e g s e b t n e g e r e r n a o - - f ca int di z eMnesdwi c ha or e r. eFlryo mo n 2g0o1v0e rt on m2 0e n2 t0 , ptrhoeg br aomo ms el irkse aSdodcei da l 1S5e. 5c umr i itly- ll iaor ng epset ohpi lset ot or i tcha el iangcer eg ar os eu?p Ferl iogmi b l1e9f 8o 0r tthoe s1e9 9p 0r o, gart aomnsl y. T5h. 7e nme ixl t- lion. 12 groSwoiwn gh ny udmo ebse ri t omf as et tneiro tr hs arte Aq umi reer si caan’ s ipnoc pr eual as itni ogna ims oa ug inntgo? f TShoe- cviearlySreocsuyr.ity and Medicare spending. And the projections aren’t s h oLueltd’ s hgaov eb accokmt eo wt hiot hs e ag wo vaerrnni nmge: nLt ortes poofr tgso. v( eMr anymbeentth ri se pboorot ks ahead …) 11 t o U2 .0S2. C0 eant sFuassBt eusrteRa aut. eMSai ny c2e51, 82 80 02 3t o. “1U8. S9. 0O”l dh et trpPs o: /p/uwl awt iwo n. c eGnr seuws .Fg roovm/ l i2- 0 1 0 gbrreawry./hstmtolries/2023/05/2020-census-united-states-older-population- 12 Ibid.
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