I have good news and bad news for you.

The good news : For a long time now, I have encountered increasingly more people who are saving money for retirement. Not only are they saving, many are putting away enormous amounts of money. The economy has boomed for several years, the job market is solid, and the stock market soars. Times are good.

So, what’s the bad news ? In a word, complacency . A definition is “ self-satisfaction, especially when accompanied by unawareness of actual dangers or deficiencies .” Complacency is a serious risk in any industry, and interestingly, it’s possibly a greater risk to those who are highly experienced and competent. The more confidence we have in our own abilities, the more likely we’ll have our guard down when a threat occurs.

How does this apply financially? This brings me to the two biggest threats to your retirement .

The two biggest threats, in my opinion, are taxes and health care costs . Anything else is a distant third. We will confront these beasts in separate letters, and in the spirit of tax season, focus on taxes today.

While our national debt is more than $23 trillion dollars, our Fiscal Gap (what we really owe) is more like $239 trillion – 10 times more! I’m not going to list the myriad evidence that our economy is unsustainable, you can research “fiscal gap,” “Medicare shortfall,” or other such topics on your own (a couple links are provided below).

Where are they going to get the money for everything? Isn’t it obvious? Taxes. It won’t just be tax rate hikes, which are highly unpopular. It will be in taxes-by-any-other-name, including inflation, the greatest tax of all and one which requires no legislation. But another important question to consider is WHO they are going to get the money from.

Here’s a fun exercise: go to the Social Security website and see what percentage of American wage earners earn less money than you. Remember, “wage earners” don’t include the 40%-plus of Americans who don’t work at all. Then ask yourself, when the government needs more money, who are they going to target, those in the bottom 90% or those in the top 10% ? (Just in case you don’t view this webpage, if your household brings in $100,000 , you’re in the top 10% ).

People who narrowly focus on rates of return – whether a fund returns 3% or 7% or 10% over time – might be missing the forest for the trees. Whether taxes siphon off 30% or 50% or 70% of what your investments earn should be as much or greater of a concern.

I speak with many people who haven’t altered their investment strategies in several years… despite the fact that a bull market has never lasted this long in history , and that in 2018 major tax law changes took effect . If the financial landscape has significantly changed, but your strategy has not, could this be financial complacency? 

Let’s end with good news . There is a way not only to prepare for these eventualities but also to position yourself to take advantage of them ! Tax rates, in fact, are historically low , and high future taxes can be legally avoided without taking on market risk . Did you know that? Arieff Consulting can show you how to do this. We provide a free, no-obligation financial analysis and a simple one-page funding solution showing how it all works, backed up with the math.

I’m not big on predictions. Being wrong is embarrassing and harmful to one’s credibility. But I’m 100% confident in making this one: we will look back on the tax environment we are in right now, and kick ourselves for not taking advantage of the incredible tax opportunities that existed while we had the chance. We’ll likely never have this opportunity again in our lifetimes. At the latest, the current tax rates go up on January 1 st , 2026.

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February – The Two Biggest Risks to Your Retirement – February 2020 (Pdf Download)

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Thank you for your time and for taking control of your financial future!

Sincerely,

Sam Arieff

Arieff Consulting

www.arieffconsulting.com

(904) 478-0102