Our firm has been telling the public since we opened up in 2008 that we believe tax management will be as crucial to your overall financial plan in the next decade as asset management.   We are of the opinion that taxes will go up over time not due any political issues, but really what we will be happening over the next decade with distributions from social security and stagnating incomes in the X and Y Generation.   Now, the facts are beginning to come out for us to see in black and white.

The inflation-adjusted income of the median household – smack in the middle of the populace – fell 4.8% between 2000 and 2009, even worse than the 1970’s when median income rose 1.9% despite high unemployment and inflation.   Between 2007 and 2009 incomes fell 4.2% to an average median household income of $49,777.   Within that median household income, the Asian minority group averaged $65,469, Hispanic $38,039, Black $32,584, and White at $51,861. (source: WSJ 9/17/2010).

What is truly interesting inside of this data is how hard hit the Generation X/Y group has been it especially in the area of young workers and young families.   The number of 25 to 34 living with their parents is up almost 60% from 2008 to 2010. (source: WSJ).   Many younger workers are having a very difficult time finding a job or qualifying for unemployment benefits due to their shorter work history.

Kile Lewis, who is our other co-CEO, plays the game connect the dots at our financial workshops. 75 million plus baby boomers will be retiring and needing more money from the social security system/medicare system.   At the same time, the X and Y generation are making less money on an inflation adjusted basis and moving back home.  Those two items along with our racked up national debt will most certainly lead to higher taxes.

If retirement is within 10 to 15 years for you, there are some serious considerations you may need to revisit within your overall retirement plan.   What happens if your personal income is the same or less over the next 10 years?   What happens if your children move back home for 5 more years?   What happens if tax rates go up?  What happens if your company sponsored pension or company 401(k) match goes away?  What happens if the double digit inflation of the 80’s rears its ugly head again?

These are just a few of the things you should be considering as incomes fall in America.   As the CEO of your family finances, your retirement plan and results will ultimately fall squarely on your shoulders.   You don’t know what you don’t know.   However, you can take what you know, and use it to your fullest advantage so you can retire comfortably.   Tax management will be just as crucial as asset management, so begin getting a proactive plan in place today so you can keep more of what you make.

Call 800-355-9318 for a free consultation with oXYGen Financial today.

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.
Request a FREE consultation

Suggested Articles – Top 10 Questions To Ask Your Financial Advisor , Top 10 Financial To Do’s During Open Enrollment Season , Should You Take A Low Ball Salary Offer? , 5 Disaster Financial Moves , Estate Tax To Return In 2011 , Time to Fix Your Natural Gas Rate?

oXYGen Financial, Inc. co-CEO Ted Jenkin  is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.

TED JENKIN IS SECURITIES LICENSED THROUGH INVESTACORP, INC. A REGISTERED BROKER/DEALER MEMBER FINRA, SIPC.  ADVISORY SERVICES OFFERED THROUGH INVESTACORP ADVISORY SERVICES, INC. A SEC REGISTERED INVESTMENT ADVISORY FIRM. Linked sites are strictly provided as a courtesy. Investacorp, Inc., and its affiliates, do not guarantee, approve nor endorse the information or products available at these sites nor do links indicate any association with or endorsement of the linked sites by Investacorp, Inc. and its affiliates.