42 • MARTIN H. RUBY
How Are You Going to Pay Off All That Debt? The government is in trouble.
The federal debt is rising and rising. In the last chapter, we talked about how this was a good incentive for the government to keep interest rates low. It’s also a good incentive for the govern- ment to raise taxes. Remember what we mentioned in chapter three: more and more Baby Boomers will be retiring and drawing on Social Security and Medicare. The government will owe more people benefits, but not have more revenue (i.e., taxes) coming in. That’s going to cause a big imbalance. ¹⁰ 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.
¹⁰ 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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