Website design By BotEap.comDo you have a retirement plan that gives you a small tax break now in the current tax year, and you pay a larger tax later when you finally retire? In addition to the higher tax, you are required to start paying the tax at 70 1/2. It bears repeating, you pay higher tax later on and are forced to start paying that tax at 70 1/2. Nobody explained that before? Is there a possible solution?

Website design By BotEap.comThis is an important topic because many working adults plan to retire eventually. Most of them had no idea how it will play out when they retire. They feel that by contributing in the workplace they will be AOK in retirement. Think again. Let’s think about it. Why would the government give you a tax break this year to help you save? Answer: Tax you later when taxes are higher. Have you ever sat down and done the math on what short-term savings will mean in retirement?

Website design By BotEap.comMany will lose all of their tax deductions when they retire. The kids will be grown and hopefully out of the house by then. Perhaps your only job in raising children is to spoil the grandchildren and then send them home to their parents. If you play your cards right, your house will be paid off and you won’t get a tax deduction for it. Losing some of these deductions increases the amount you will have to pay when withdrawing.

Website design By BotEap.comMany people are doing well enough to retire early. With traditional retirement planning and savings, you can’t withdraw money from your retirement account until you’re 59½. You may have to stay locked up at your job until the government says you can take the money without penalty. Many American workers may not realize this is happening to them. It can be 30 years later when an employee can begin to realize this and feel a knot in their stomach because their entire career they had no idea this was happening and if there was another way around it.

Website design By BotEap.comAmericans live for instant gratification. If we want something and can’t afford it, we put it on a credit card and worry about it later. The new Fords have the latest technology in their next year model, you will finance it just to have it. Even some families don’t talk about life insurance until it’s too late and they have to pull out their savings to handle everything. With retirement so many years away, many put it off and say they’ll deal with it later. This could have negative consequences, such as discovering that you will pay more taxes in retirement than you would have thought. To make matters worse, there is a way around it, even if you have to pay a little more taxes over the years of employment instead of paying higher taxes in retirement.

Website design By BotEap.comOnce we start thinking outside the box and discover there is a problem (with a solution) and you need to change it, fast! The unfortunate part is that many financial planners are not aware of any tax-free retirement plan or are resistant to change because of what they are used to. They can even throw libelous comments toward tax-free retirement. If a financial advisor or planner starts doing this, ask them to provide proof or evidence to support their statement. I have yet to have one that provides evidence that it is bad news.

Website design By BotEap.comThis tax-free retirement uses the framework of an Indexed Universal Life insurance contract. By allocating similar funds to a traditional retirement account, you finance indexed universal life insurance and would receive the upside gain of the market, but not the downside loss. Which means you don’t have to rally when the market goes south. This will allow the cash in the policy to grow at a much faster rate. If designed correctly with an expert, you will avoid making a life insurance taxable event by putting the right pieces together to have the right amount of death benefit that matches the funds being contributed.

Website design By BotEap.comIf you decide to withdraw early, you can do so without worry or the burden of an early withdrawal penalty. Once you start withdrawing the money, it’s tax-free, in part because of the after-tax dollars. This complies with Section 7702(a) of the tax code. This will allow you to enjoy the fruits of your labor during your working years to enjoy the money it puts to work for you, so you don’t have to work anymore. All of this allows you to enjoy a stream of income for the rest of your life. With proper planning, you can achieve your financial goals and pay less in taxes.

Website design By BotEap.comThe planning process begins by working with the right subject matter expert. Every situation will be different and the end results may not be the same compared to others in the plan. Plans are subject to approval based on individual carrier’s underwriting guidelines. By talking to an expert, you’ll have a plan that best suits your wants, needs, and budget.

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