---
title: Your Client's Hidden Debt
description: Do your clients have hidden debt? Chances are, the answer is yes. Learn how to eliminate it.
---

[Stonewood Financial Blog ](https://blog.stonewoodfinancial.com/blog)

# [Your Client's Hidden Debt](https://blog.stonewoodfinancial.com/blog/hidden-debt)

 Written by [Neil Wilding](https://blog.stonewoodfinancial.com/blog/author/neil-wilding) | January 25, 2018 at 3:45 PM

I’m sure you run across clients who are true followers of [Dave Ramsey](https://www.daveramsey.com/blog/get-out-of-debt-with-the-debt-snowball-plan?snid=start.debt-b). These clients are committed to getting debt-free in all aspects of their finances.

But Ramsey and his followers overlook a HUGE debt nearly every American carries: Their debt to Uncle Sam.

**Do your clients have funds in qualified accounts? If so, they’re not debt free.** Here’s why:

When your client looks at his IRA statement, he sees a balance of $500,000. And he starts thinking of how he’ll manage and spend that $500,000.

But he forgets: that account is NOT worth $500,000. Because every IRA and 401(k) includes a debt to Uncle Sam. And your client begins paying back that debt the day he withdraws funds and has to pay taxes on them.

**Taxes are your client’s debt to Uncle Sam.**

(In truth, your client pays back the debt with interest: after all, he deferred taxes on his contributions, but he’s paying taxes on his contributions *and* account growth).

Think of it this way: If you have a 25% tax liability, you are indebted to Uncle Sam for a quarter of your savings. That’s $125,000 in our example above.

Tax-deferred saving has become a mainstay of American retirement plans. Which means nearly all your clients owe a debt to Uncle Sam, and many of your clients would benefit from tax-efficient income planning.

Make 2018 the year you help your clients get out of debt to Uncle Sam.

[Curious to see Uncle Sam’s total share of your client’s IRA? [Join our webinar](http://www.onlinemeetingnow.com/register/?id=lcp7kjexzl&) and learn how.]

 

[View full post](https://blog.stonewoodfinancial.com/blog/hidden-debt)

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