Brian McLane

Media and Social Commentary

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Middle Class Forced To Fend Off Government Attacks On Retirement Planning

July 14th, 2011 · 1 Comment · Social Commentary

It’s coming. Maybe not today or tomorrow or even next month. But one day people are going to turn around and realize they’re “out to sea”. Get ready for the reverse mortgage. Talk about selfish. I suppose if you have no one to leave anything to it’s okay. The middle class can look to life insurance as one strategy to hedge against the looming reductions in benefits and increases in taxes.

I’ll even go one further. Shame on you if you haven’t thought about setting up a financial strategy for your kids. One of the ways people can prepare for this onslaught against the middle class is with life insurance. The general feeling amongst knowledgable investors is that 15% of one’s portfolio should be in life insurance. While dividends from mutual companies aren’t guaranteed, some like New York Life have been paying them for over 150 years.

It’s a great, safe and low-cost way to set money aside for the future and to make sure he’ll have insurance as an adult, in case an illness later in life makes them uninsurable. Also you can access the cash values that are accruing and use it for tuition or whatever I need to do for my family. Why leave money on the table? Or in a bank where it’s doing nothing.

Some of the living benefits of Whole Life are that dividends (again which aren’t guaranteed but generally pay about 4 times what the banks pay in interest), can really grow over time. It’s a long term play that will provide a nest egg for today’s kids and benefit them as they reach their forties and the parents have started enjoying retirement. The point is that as government begins to chip away at middle class incomes, families will need to counter by leveraging every tool available to them. Don’t believe me?

The deficit is so great, that targeting the rich or taking away from the poor will not be enough. Pension and health care plans will cost an average of about $5,000 a year more in New Jersey. Medicare, community infrastructure, education grants and loans, property taxes going up, cuts to benefits, social security…. all of it will be fair game.

Click the empty beach chairs to watch an EXCELLENT video on Marketwatch which details, how even families that consider themselves to be comfortable with a home and over 100K in annual income, are being targeted to pay more.

How you won't be spending your retirement

How you won't be spending your retirement

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