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Why Invest?

If you have a 401k or IRA, or some other tax-protected investment account, you need to read this:

As the federal government becomes a health care state, there will have to be a generation of defense cuts that overwhelm anything in recent history. Keep in mind how brutal the budget pressure is going to be. According to the Government Accountability Office, if we act on entitlements today, we will still have to cut federal spending by 32 percent and raise taxes by 46 percent over the next 75 years to meet current obligations. If we postpone action for another decade, then we have to cut all non-interest federal spending by 37 percent and raise all taxes by 54 percent.

When you have to raise revenue by that amount, nothing is going to be safe. The government will have to start taxing these protected retirement accounts in the coming decades. Unless you are less than 10 years away from retirement, it’s time to stop putting money into your 401k.

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