Many economists think you should be worried about expiring tax cuts. Because if these tax cuts expire, it would be an immediate haircut for your retirement savings.
You might be concerned about inflation, stock market volatility or a possible recession. But many economists think you should be worried about something else:Because if these tax cuts expire, it would be an immediate haircut for your retirement savings.
But with these changes set to expire soon, Americans could be paying much higher taxes on their income and investments. And this could be especially painful for retirees.To put it simply: A lot has changed since the tax cuts were enacted in 2018. But here's something that's important to understand: the government doesn't have any money of its own. Its only source of revenue comes from taxes. And all of this debt has to be paid back somehow.
We aren't suggesting that the highest tax rates will return to 70%, but there's a lot of room for the government to raise today's rates.If the Trump tax cuts expire in 2025, retirees could face significant financial hardship. Given that many retirees are already struggling with higher living expenses due to sustained inflation, higher taxes could be one more devastating blow.Even if the Trump tax cuts don't expire, our national debt is still more than $32 trillion. So either way, higher taxes could be just around the corner.