Can the U.S. Government own stocks?  Legally no, but after reading this article you will clearly see how through 401k’s, IRA’S, SEP- IRA’S, or any tax deferred plan, how the government has made you their stock buying mule. You will also learn how to unravel this manipulation.

Matt Kennedy, founder of Kennedy Wealth Design and author the bestselling book; Untapped Wealth: How to Use Little Known Strategies to Stop Losing Millions to Banks, Wall Street, and the IRS…and Beat Them at Their Own Game, specializes in working with business owners, entrepreneurs, and high income professionals to increase their cash flow, decrease their taxes, and help them have a better life, a better business, and a bright future.

Are You the Government’s Stock Buying Mule? Let’s first look at what is happening inside our tax deferred accounts.

 

Image 1

 

In Image 1, you have decided to invest $10,000 at an assumed 6% for a time period of 30 years, at an assumed tax bracket of 30%.

 

Image 2

 

Image 2, when calculated this is what is shown. The account balance on the statement shows that there is a balance of $57,435. However, if you decide to take it all out in one lump sum. You will pay the IRS $17,230, which will leave your share of $40,204.  This shows that there are two accounts inside your tax deferred plan, your account and the IRS’s account.

 

Image 3

 

If you decide to pay your $3000 taxes upfront with the same investment return, years until withdrawal and tax bracket percentage, Image 3, shows the account balance at $40,204, your share of $28,143 and a payment to the IRS of $12,061.

 

Image 4

 

Image 4 shows what would happen if you paid your $3000 to the IRS first. Notice when you maintain the same return of 6% on investment, the same year until withdrawal, but you are not paying the IRS 30 years later because you have paid them out of the $10,000 up front, your account balance equals your share. The IRS has nothing due.

 

Image 5

 

Image 5 demonstrates a scenario of taking that $3,000 in taxes you paid the IRS as if you invested it with the same return rate, years until withdrawal and a 0% tax bracket. Your account balance is $17,230 and your share is $17,230, owing the IRS $0.

Image 5 also slide shows what happens if I keep the IRS $3,000 in and let it grow at 6% for 30 years in your account.  Their $3,000 grows to $17,230.  This is why Congress offers these types of accounts.  This visual shows that tax deferred accounts can be a great way for the government to prepare for their future as we prepare for ours. They use 401k’s and other tax deferred accounts to invest tax revenue they could have received today alongside our money.

How can you stop being the governments mule?

To find out if there’s a better way, click on the link here to schedule a 15 minute call with me.

 

 

Securities offered through FIRST HEARTLAND CAPITAL, INC.