HOW TO BUILD THE FOUNDATION FOR A TAX-FREE RETIREMENT!

With the introduction of vast new and unpredictable healthcare laws, the markets will continue to be impacted by everything from slight to sweeping changes to this legislation. Even as these healthcare laws become increasingly irrelevant (with private companies and individuals bypassing the system with better alternatives), the industry’s legislative comings and goings will impact the economy.

While experts like David Walker, former US General Comptroller, have been clamoring for years about this time bomb, the federal government is just starting to discuss potential solutions for our nation’s out-of control blank check. The ramifications of a plan to pay for this debt, no matter what the solution is, will be very, very difficult for the markets to swallow without major upheaval.

As taxes increase, the market will react sharply negative. The more taxes go up, the less consumer spending will occur, and unemployment will rise as employers won’t be able to afford to hire or innovate (or will choose not to), which slows down the economy on a number of levels. Raising taxes is inevitable, when you consider the effects of massive national debt, the war on terror, national health care, and aging infrastructure.

I am optimistic that America will get through these challenges as it always has, but those Americans who are hoping that stability and security will be found through their 401(k) and IRAs are figuratively grasping at straws. It is evident that the next decade will be full of bumps and bruises for those who have not protected themselves from the brutal force of market volatility.