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Much
of what we expect from our Government in
retirement may be in need of evaluation. The crush
of Baby Boomers will be a heavy burden on the programs
that have been put in place to help all of us in our
later years.
The Cost of Government
Programs
The three major programs that are
currently in place
to support us in retirement are going to cost more
provide less and be put off for longer periods because
of the way they have been mismanaged up to this point.
Medicare
Medicare currently uses about 11%
of all tax dollars
to pay for programs. As the Boomers reach age 65,
which starts in 2011, the percent of tax dollars
needed to support the system will rise to 24%
in 2019 and 51% in 2042. (Remember the line;
"you will be in a lower tax bracket in retirement")
Medicaid
We currently bring in enough in
Medicaid taxes
to cover about 79% of all benefits needed. By
2020 though the funds in the Medicaid trust fund
will be exhausted meaning that we will need to
find additional revenue sources to continue it's funding.
Social Security
If you are planning on social
security to help you
in retirement you must realize that there are two
trends working against you:
The Social Security Trust fund will
begin to be
breached around 2018 and will be completely
depleted by 2044.
If your income in retirement is
comprised of
taxable dollars from your IRAs and 401ks, up
to 85% of your Social Security benefits will be
taxed as part of that income, further reducing
your total after tax income.
If that isn't
enough, let's look at health care.
Read on:
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