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Taxes on Unrealized Gains Mean the Destruction of Your Retirement Assets

by Eric Seyboldt 

In the dark halls of Washington, a potential storm approaches—a proposed bill that could disrupt the financial futures of millions of Americans. Democrat lawmakers are advocating for a tax on unrealized gains, an alarming move that could bring dire consequences to both pre-retirees and retirees. For those who have spent their lives building wealth and preparing for retirement, this tax means the end of a comfortable standard of living for tens of millions of Americans.

So, what are unrealized gains? These are the paper profits on investments that haven't been sold yet, meaning the investors haven't received any actual cash. However, under this new bill, these "phantom gains" would be taxed annually, a significant shift from the current system, which only taxes gains when they are realized through a sale. This isn't just a change in tax policy—it challenges the core principles of wealth building in American and financial security.

The repercussions won't be limited to a single asset class. Stocks, bonds, mutual funds, real estate, and even collectibles like art and rare coins would all be impacted. Consider a retiree who has held onto shares of a company for decades, waiting for the optimal time to sell and fund their retirement. Under this bill, they could face hefty tax liabilities every year, irrespective of whether the stocks are sold. The effect on retirement portfolios could be devastating.

Property owners wouldn't be exempt either. Real estate values generally increase over time, and the tax on unrealized gains would apply to these properties too. For retirees who own real estate, this could mean thousands or even tens of thousands of dollars in taxes on properties they never plan to sell. It’s a harsh blow to those who rely on their property as a financial safeguard or as a source of rental income.

Furthermore, this new tax could induce a decline in asset values. Just the anticipation of such a tax might drive investors to sell off their holdings before the law is enacted. This rush to sell could lead to a crash of the stock market, eroding the wealth that pre-retirees and retirees have painstakingly built over their lifetimes. It could also result in reduced liquidity, making it tougher to sell assets when most needed.

For those who depend on fixed-income investments like bonds, the scenario isn't any better. Bond values could decline as interest rates rise in response to economic instability. This would offer pre-retirees and retirees fewer low-risk investment options, pushing them to take on more risk to maintain their standard of living.

The proposed tax on unrealized gains is more than a simple tax increase—it is a direct threat to the retirement aspirations of millions of Americans. It jeopardizes the financial security that many have worked tirelessly to achieve. If this bill is enacted, it won't just affect the wealthy; it will negatively impact anyone with an investment portfolio, a piece of property, or even a modest retirement plan.

This tax proposal is a ticking economic time bomb, and its detonation could devastate the financial futures of countless Americans. Pre-retirees and retirees need to speak up, stand firm, and oppose this attack on their hard-earned wealth. Immediate action is crucial, before the consequences of this reckless policy become a reality.

Reach out to us for a complimentary, 10-minute consultation call. Let's explore together how we can help you protect your assets, ensuring your golden years are as fulfilling and worry-free as you’ve always imagined. Email Eric at [email protected] or give us a call today to schedule your consultation. Let's make your retirement dreams a reality!

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Client: “Eric, I've heard that avoiding losses is crucial for long-term investing, especially for retirement. But how does this really impact my portfolio in the long run?”

Eric: Think of your retirement portfolio as a well-crafted ship braving turbulent seas. Each wave symbolizes market volatility, though not all waves are created equal. Even a seemingly small loss can have prolonged effects on your financial voyage.

Here’s the reason: after a portfolio suffers a loss, it must work significantly harder to simply return to its former state. For instance, a 10% loss doesn't just need a 10% gain to recover; it requires an 11.1% increase. A 20% loss demands a 25% bounce back. As losses grow, the necessary recovery rate escalates steeply—reaching levels that may be unattainable, especially when time is limited.

Consider your retirement portfolio as a fragile equilibrium between growth and preservation. Exposing it to risk without protecting against potential losses could destabilize it, leading to financial uncertainty. Losses not only reduce your wealth but also weaken the base for future growth. Each loss diminishes both your current security and future potential.

Retirees face a unique challenge known as Sequence of Returns risk. If the market drops early in retirement, these initial losses, paired with withdrawals, can hasten the depletion of your savings. This downward spiral can turn a solid plan into a quick route to financial trouble. The more your portfolio declines, the harder it becomes to bounce back. And in retirement, time is a scarce resource.

Thus, prioritizing strategies to prevent losses—such as diversifying assets, making tactical adjustments, or opting for conservative investments, such as index annuities—becomes essential. It’s not about eliminating risk entirely; it’s about managing it to keep your retirement goals on track, regardless of market upheavals.

Final Thought: Retirement should be a period of tranquility, not worry. It ought to be a reward for years of effort, not a battle against shrinking resources. Losses are inevitable, but the key is in how you mitigate them. Protect your portfolio now to ensure your future remains as gleaming as you’ve envisioned. The true strength of your retirement plan lies not only in the gains it secures but in the losses it avoids.

Contact us for a free, brief 10-minute consultation. Together, we can discuss ways to safeguard your wealth and ensure your retirement years are as enjoyable and stress-free as you've envisioned. To arrange your consultation, send an email to Eric at [email protected] or call us today. We're here to help turn your retirement aspirations into reality.

Fixed annuities can be an essential component of a well-rounded retirement strategy, offering security, predictability, and efficiency in financial planning.

Here are current fixed annuity rates and their durations from Top A-rated carriers (subject to change at any time, not FDIC insured):

The First of 3 Monthly .25% Rate Decreases Starting! Don’t Wait To Lock These Fixed Annuity Rates In Today!

3-year: 5.15% (under $100k Deposited)

3-year: 5.40% (over $100k Deposited)

5-year: 5.60% (under $100k Deposited)

5-year: 5.90% (over $100k Deposited)

Please feel free to email Eric at [email protected] if you’d like to ask any questions or request information on these fixed annuities or other retirement topics that are on your mind.

REAL ASSETS, Invest Like the Ultra-Wealthy 

Have You Considered Adding Gold or Bourbon to Your Investment Portfolio?

Given the current economic uncertainties, many savvy investors are turning to physical assets to safeguard their retirement funds. Tangible investments such as gold and even bourbon barrels are becoming increasingly popular. These real assets act as a strong shield against the effects of excessive money printing and rising prices. They also offer excellent diversification options during times of economic stability.

Historically, physical assets have consistently outperformed other types of investments during economic downturns and market instability. They provide a reliable protection against potential financial turmoil. Including tangible assets in your investment strategy can be both wise and rewarding.

Considering today's economic volatility, investing in physical assets could be a prudent way to maintain the resilience of your financial plans. Are you interested in exploring how these tangible investments could enhance your portfolio?

Allocating funds into the asset class known as “Real Assets” may be a strategy that you should consider.

Ask us how to Rollover a portion of Your IRA or 401k To A BOURBON IRA (www.bourbon.fund/how-it-works/) or a GOLD IRA (see link below) and:

• Safeguard your assets from the collapsing dollar

• Incorporate the ‘REAL ASSET’ class into your portfolio like the ultra-wealthy

• Hedge against the current high-inflation conditions

• Protect your retirement assets against economic crises

Just get in touch. We make it easier than ever.

Feedback or Questions?

You’re invited to get in touch with us if you’d like to find out how the Novus Financial Group can help you on your journey to a happy, fulfilling life in Retirement. 

We have a lot of great information, as well as podcasts from our radio show ‘The Financial Insider’, and tools on our website - www.novusfg.com.

[email protected] www.novusfg.com [email protected]

Office: 614-943-2265

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Investment advisory services are offered by duly registered individuals on behalf of CreativeOne Wealth, LLC a Registered Investment Adviser. CreativeOne Wealth, LLC and Novus Financial Group are unaffiliated entities.

The content we provide here isn’t financial advice and cannot be taken as such. Please speak to your financial advisor before making any investment decision. Also, note that every investment comes with its risks and drawbacks. Lastly, we would like to remind you that past results cannot guarantee future returns.

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