I’ll Keep This Short
With the support and endorsement of speaker of the House Nancy Pelosi, Bernie Sanders has introduced a bill to save Social Security. So far so good. However, instead of fixing Social Security by addressing the real problem, Sanders’ idea is to throw more money at the same problem. Guess where the money will come from? FROM YOU.
The Core Issue
- must be reconfigured
- costs a lot of money
- becomes more costly every year
Social Security began in 1935 when the average U.S. life expectancy was age 64.
The average U.S. life expectancy for a 65-year-old is currently a little over age 80. One out of every three babies born today will live to age 100.
Yet during all this time of increasing life expectancy, the start age for full Social Security payments has increased just two years to age 67. Hence, a system intended to help less than half the population for just a few years has been supporting nearly the entire population for the last 15 years.
To fix Social Security, Congress must adjust the start age.
Bernie Sanders’ bill leaves the Start Ages unchanged. The bill increases taxes for individuals earning $250,000 and more (from all sources). This includes earnings you make from capital gains on investments.
As IRA Club is an IRA and Solo 401(k) administrator, we will always be most concerned with taxes on your investment income. The tax as proposed in Sanders’ bill applies an additional 12.4% tax (payroll tax) on investment income (this new tax would be on top of the 3.8% tax on investment income that went into effect in 2013 for the Affordable Care Act).
Will Sanders’ bill pass? I don’t know. Not knowing for certain is yet another reason to make your best investments inside a Self Directed Roth IRA to avoid our ever-increasing tax burden.
IRA Club offers no investments, products, or planning services. Therefore, please consult your attorney, tax professional, financial planner, and any other qualified person before making any investments. Be advised that IRA Club does not evaluate, review, monitor, recommend, warrant, guarantee, or otherwise endorse the legality, tax treatment, propriety, performance, or reliability of any investment, service, statement, opinion, or other representation provided with respect to the investment opportunities listed on its site or their sponsors or providers. IRA Club has no financial arrangement, partnership, joint venture, or other affiliation with the sponsors or providers of these investments. IRA Club shall not be liable for any misinformation, misrepresentation, negligence, act, omission, investment results, or any wrongdoing with respect to any of these investments or their sponsors or providers.