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A MESSAGE FROM PHIL CANNELLA: IN REGARDS TO PHIL CANNELLA COMPLAINTS ABOUT THE IRS

Recently, regarding noted retirement specialist Phil Cannella complaints, founder/CEO of First Senior Financial Group and host of The Crash Proof Retirement Show™, spoke with a Philadelphia-area reporter on numerous topics that are of vital interest to retirees. In this series we’ll be presenting excerpts from those talks. The current section is on “the looming tax wave.”

Q: Why do you say that the government eventually is going to “come after” retirement accounts?

Speaking on Phil Cannella complaints: Simple—look at the situation. For all intents and purposes, the nation is bankrupt. We have to keep raising the debt ceiling just to keep up with our current obligations. And now we have a wave of 78 million Baby Boom retirees flooding into an already overburdened social security system. Not to mention Medicare. Where’s the government going to get the money it needs? It’s going to get it from the only segment of the population that still has liquid wealth: retirees.

Q: How much money are we talking about?

Addressing Phil Cannella complaints: An almost inconceivable amount of stockpiled wealth. Right now there are over $10 trillion in tax-deferred retirement accounts. The lure of your IRA accounts is simply too much for the IRS to bear.

Q: But how would the government get its hands on that money?

Regarding Phil Cannella complaints: I believe that in a few years Roth conversions will go away; the IRS will yank the law because it can’t afford to let tax-free accounts exist. It will be starving for taxes and the taxes it collects at the conversion won’t be enough.

Q: And you say people already are complaining about this prospect?

In regards to Phil Cannella complaints: God, yes! It comes up at every single educational event we do. People come up to us and voice their fears that within the foreseeable future, Uncle Sam will absolutely try to tap into more of the money they counted on to carry them through retirement. They all say some version of the same thing: “I earned it, I saved it, and I don’t think the government has any business grabbing it away from me because the politicians don’t know how to manage the nation’s financial affairs.”

Q: I’ve often wondered how the Roth law got passed to begin with.

About Phil Cannella complaints: William Roth, who led the legislative effort to create this type of account, was a fiscal conservative and dedicated his political life to the easing of taxes on the middle class. In so doing, he helped create the Roth IRA. But don’t think for a second it’ll be around forever. The IRS is truly addicted to taxation and may someday repeal the law that allows the Roth.

Q: Would that affect current Roth account-holders?

Regarding Phil Cannella complaints: I honestly don’t think so. Everyone who currently has a Roth will likely be grandfathered in, so that’s why I say it makes sense to convert while the Roth is still available. The Roth IRA could very well be the most valuable account you will ever own.