Last month we examined the Social Security questions we ought to ask our clients. Let’s dig deeper.
Many sources, including www.usdebt clock.org, disclose that the unfunded liability for Social Security is $15 trillion. It is becoming clear that action will have to be taken by our government to keep the program viable.
Now, let’s discuss Medicare. Ask your clients these questions:What is the unfunded liability for Medicare? (Answer: $89 trillion.)
- 1. If we can’t fix Social Security, how can we fix Medicare?
- 2. Have you read the Social Security and Medicare Trustees Report? (Show them.)
3. Did you know it states that the hospital portion of Medicare could go bankrupt in seven years?
4. How many of the 78 million baby boomers are already on Medicare?
(Answer: None. It’s a trick question. They don’t start to turn 65 until January 1, 2011.)
5. What will happen when those baby boomers are added to this nearly bankrupt program? Will we let it go bankrupt? (Answer: No, we will raise taxes, lower benefits and print money to provide the promised benefits, which will cause inflation.)
Now, what about the health care reform legislation? Did you know that the health care entitlement legislation is already bigger than Social Security and Medicare combined? Where will we get the money? Again, we will raise taxes, lower benefits and print money to provide the benefits.
Great salespeople ask great questions. Don’t assume your clients already know. Ask them: Will we have higher taxes? Will we have lower benefits? Will the government need to print money? Will we face inflation (the stealth tax)? Will this cause great volatility in our markets? The answer is always yes.
So how do you protect yourself from these challenges? And, more important, how do you position yourself to take advantage of them? Our products can provide solutions.
We have products that allow Americans to pay their taxes now and invest their money in vehicles that will accumulate without ongoing taxation. That money can be withdrawn in the future without income tax. Those vehicles are cash-value life insurance, Roth IRAs and 529 college savings plans.
We also provide tax-deferred programs, like IRAs, annuities, modified endowment contracts and the new combo life and annuity contracts. Tax deferral is triple compounding (interest on principal, interest on interest, and interest on the taxes they would have paid annually on a taxable investment).
Show your prospects and clients how they can take control of their financial futures now, rather than waiting to see just how bad it gets.