Tag Archives: social security crisis

Social Security

Why you must build passive retirement income

Social Security is half the income for 61% of Americans

You must have your own passive retirement income.  Social Security is anything but what its name says.  It is estimated the $2.8 Trillion in reserves will be depleted by 2034.  While 85% of Ameicans say Social Security is important, the facts are the remedy to the problem are political suicide.  Neither Congress nor the populous have the will to take action.  Kicking the can down the road makes the problem worse.  I am not betting my future on the hopes of millennial’s generosity to raise their taxes.  Passive income that you control is your own security trust fund.

Congress has embezzled $2.5 Trillion from Social Security

Congress has not met a spending bill it did not like.  The large trust fund sitting there waiting on your retirement was too tempting for them to avoid.  Buy votes today and leave an IOU in the cash register.  The reason Congress wants to cut or delay benefits is they do not want to face accountability of paying the money back.  The fact is they know it cannot be paid back.  The only real choice will be to raise taxes and remove the contribution ceiling.  Congress was not fiscally trustworthy for the last 50 years. Taking more money from the people will not cause their ways to change.

Passive income is exempt from Social Security tax

Earned income is subject to social security tax.  Currently, unearned income is not subject to the tax.  Investing in passive income streams like real estate gives cash flow that is exempt from social security.  Take you income stream out of the path on Congress.  Wise  financial planning would dictate you make it as difficult as possible for them to steal your savings.  Real estate passive income when held in a real estate business also lowers your overall federal income tax.  Not only are your social security and income taxes lowered but you get equity  build up with renters paying off your mortgage.  Moreover, the income increases with inflation.  We have recently raised the rents on all of our properties in-line with current market trends.  Our percent return increases each passing year.

Experts speculate Congress might raid private 401k’s

I am not a doom and gloom conspiracy person.  However facts are that desperate governments do desperate things.  The crisis will not go away and it will only get bigger.  Each day 10,000 baby boomers turn 65. Socializing retirement funds is one possibility for the government to remain solvent.  While it seems fanciful now, a Greek style crisis in America may cause a drastic shift in policy.  I have moved my 401k to be self-directed.  Moreover, we only contribute enough to get my husbands company match.  Our real estate business provides more than enough tax deductions to make our passive income tax free.  There is no need to defer taxes in a 401k.  There is no need to pay taxes on it in the future.  I am free to use it now, before 59 1/2 .  In addition, the money is in a corporation rather than a retirement account.  The corporation lives forever.  The children already own much of the stock.  The money is out of congresses reach in a retirement fund.  It will not be subject to a death tax when we die.

Take action now building passive retirement income

The time to prepare is before Winter comes.  Those of you who watch Game of Thrones heard winter is coming for several seasons.  Winter finally arrived.  Protect your sunset years from a harsh fiscal winter looming on the horizon.  Educate yourselves and take action today  building you passive retirement income.

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