Your Client’s Hidden Debt

I’m sure you run across clients who are true followers of Dave Ramsey. 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? Click to schedule a demo.