Will National Debt Affect Your Retirement?

A default on U.S. government debt would have unforeseen but very dangerous consequences for the financial system and the U.S. economy. Here’s how to help safeguard your retirement savings with NJM Wealth Preservation Strategies. 

The national debt of a country refers to the amount of money that the government owes to its creditors. To kick off the fiscal year, the United States has a current national debt of OVER $31 trillion dollars. That is equal to nearly $95,000 owed by every single person in America. Please note: that is 95k for every single Person, not every single Taxpayer. This amount does not even include the interest owed on said debt which is accumulating at 3 Billion dollars per day currently & is set to double. 

This staggering amount of debt has raised concerns about its impact on the economy and individual citizens - including retirees - and many people see the soaring national debt as being a political problem that could possibly lead to default or hyperinflation in the distant future.

How National Debt Could Affect Your Nest Egg

Given its rapid rise in recent years following federal spending increases tied to the COVID-19 pandemic, it's easy to understand why the issue is drawing more attention from economists, financial market participants, and anyone wary of government policies. 


One concern is that the government may be “forced” to take one of its many “extraordinary measures” to reduce the debt, such as raising taxes. This could lead to retirees having less disposable income, which could make it more difficult for them to make ends meet during their retirement years. Additionally, an increase in taxes could decrease the value of retirement savings, such as 401(k) plans and individual retirement accounts (IRAs).

Social Security

Another concern is that the government may be “forced” to cut spending on programs that are important to retirees, such as Social Security and Medicare. These programs are already facing financial challenges, and cuts to them could make it more difficult for retirees to afford the healthcare and other expenses they need.

However, it's worth noting that the national debt -which just reached its limit yesterday-is a complicated issue and there are various view points from economists. 

Another important factor to note is that the government's ability to manage the debt and its impact on citizens, including retirees, will depend on a slew of variables, including the overall health of the economy, future policy decisions and global economic events. 

National Debt Protection Strategies

Retirees should consider the impact of the national debt on their retirement plans and actively take steps to prepare for future changes in the economy. 

Preserving wealth in 2023 and beyond is a complex task that requires careful planning and strategic investments. Here are a few strategies that can help:

  1. Diversify your investments: Diversifying your portfolio across different asset classes and geographic regions can help reduce your exposure to risk and increase your chances of generating returns. This includes investing in a mix of stocks, bonds, real estate, and alternative investments such as private equity, hedge funds or potentially precious metals though you should note that gold & silver are simply a commodity not a currency or investment. 
  2. Invest in low-cost index funds: Index funds are a type of mutual fund or exchange-traded fund that tracks a specific market index. They are known for having low management fees, which can help increase your returns over time.
  3. Create multiple streams of income: Building multiple streams of income can help provide more stability and reduce the risks associated with relying on a single source of income. This can include income from investments, rental properties, a small business, or a part-time job.
  4. Plan for taxes: Be mindful of the many evident & hidden tax implications of your investments and take steps to minimize your tax liability. This can include taking advantage of tax-advantaged investment accounts, such as 401(k)s and IRAs, as well as researching and utilizing tax-efficient investment strategies.
  5. Review and adjust your plan as needed: The economy, government policies and market can change over time. It's important to regularly review your investment plan with your NJM Fiduciary & Wealth Preservation Expert  to make adjustments as needed. With this approach, you can adapt to changing circumstances ensuring to align any necessary pivots with your goals.

It is worth noting how important it truly is to consult with your professional financial advisor at NJM Wealth Preservation Strategies to determine the best plan for your unique situation, and to review regularly as the time goes by. One of the key factors to a healthy retirement portfolio is professional active management. 

Final Thoughts

Overall, the national debt is a complex and multifaceted issue, and it is unclear exactly how it will be addressed & the ways it will impact the retirement plans of individual citizens. However, it is important for retirees to be aware of the potential risks and take steps to protect their retirement savings.

This may include saving more for retirement, diversifying your investments, and being mindful of the potential impact of taxes on your retirement income. It's also important for you to be aware of the changes in government policies and regulations, and be proactive in seeking true professional advice when making decisions on retirement planning.

If you are interested in safeguarding your retirement for yourself &/or your heirs, it is not too late.  Schedule a call with us today. We would be happy to give you a comprehensive analysis of your current portfolio & show you all of your best options moving forward so that you can reclaim control over your retirement & enjoy it properly. At NJM, we believe you deserve that & we look forward to helping you achieve YOUR goals.