Economists and policymakers aren’t the only ones concerned about the national debt. More people are starting to take notice—and with good reason. Moody’s recently downgraded the U.S. credit rating, the dollar is weakening, and questions about fiscal responsibility are back in the spotlight. If we ignore it, the growing deficit could become a long-term drag on the economy.

On top of that, Congress is looking to pass “One Big Beautiful Tax Bill,” so taxes are front and center.

The question is: What does all of this mean for your personal financial plan?

Where We Stand

As of the writing of this blog, the U.S. national debt exceeds $36 trillion. While this isn’t a crisis today, it’s also not something we can afford to overlook. A fiscal deficit can provide temporary boosts—like during COVID or wartime—but consistent, long-term shortfalls are unsustainable.

Eventually, something has to give. And change of this magnitude requires significant policy reforms—not quick fixes in a single Congressional session. To rein in the deficit, the government has two options: increase revenue or cut spending.

The likely outcome? Both.

One side of the aisle will likely oppose increasing revenue, and the other side will likely oppose cutting spending.

But more likely than not, both adjustments will be necessary. And it’s very probable that both would affect your personal financial plan.

What Increasing Revenue Looks Like

Increasing revenue means raising taxes—that’s not political opinion, it’s just math. But before you panic, take a look at the history of tax rates.

The top bracket once hit 94%, and over the last century or so, it averaged around 50%. So historically, today’s tax rates are relatively low. Again, this is just math—and a little perspective.

With the possibility of higher taxes on the horizon, there’s a planning opportunity: Roth conversions.

By converting traditional pre-tax retirement accounts to Roth accounts, you pay taxes now—possibly at a lower rate—and enjoy tax-free growth and withdrawals down the road. This strategy won’t be right for everyone, but for those expecting higher income or larger tax burdens in retirement, it could help you lock in today’s (presumably) lower rates.

What Spending Cuts could Mean

Reducing government spending could mean a lot of things, but we’ll focus on one aspect in particular that is most likely to affect your financial plan: Social Security.

We already know that Social Security is projected to be depleted by the mid-2030s. That doesn’t mean it will vanish, but changes are likely—either reduced benefits or later eligibility.

That said, this message is for our younger professionals: Don’t plan your retirement around current Social Security projections. Instead, focus on building independent savings through IRAs, 401(k)s, and investment accounts. You’ll want a flexible retirement plan that assumes less reliance on government support.

What You Should Do Today

You don’t need to overhaul your plan tomorrow. But this is the time to talk strategy—especially while we’re still in a historically low tax environment. If tax laws roll back to 2016 levels, we could see modest increases. That’s why now may be the right time to consider things like Roth conversions.

If you expect to retire with significant assets in pre-tax accounts, it might make sense to pay some taxes now rather than more later. Planning for the possibility of policy shifts—not reacting to them—can give you a major advantage.

The hard truth is: the debt won’t solve itself. And if Washington continues to delay hard decisions, the “solutions” could come fast and without much warning. So now is the time to think ahead.

If you want to explore what that means for you, we’d love to talk.