Summary: 3 Dangers That Threaten Retirement When you hear the word "retirement", what comes to your mind? For some people it can bring negative thoughts since the word "retirement" denotes being taken out of service. For others, it heralds the approaching golden years when they hope to enjoy the fruits of their labors. Three things that can threaten the peace of mind of those in their retirement years are higher taxes, rising inflation, and ongoing market volatility. These are dangers that we would be prudent to eliminate from our lives. They are the kind of things that could prevent us from really enjoying our golden years when we should be able to go and do the kinds of things that really make a difference. This could include family trips, church missions, humanitarian work, and philanthropy. When we're having real impact in the world, the last thing we want to have worry about is our money being eroded away. That's why it's so important have the proper savings vehicle where our money safely accumulates tax-free and not just tax-defered. This savings vehicle should allow you to access your money tax-free with the full blessings of provisions of the IRS code that have been in place for over 100 years. Finally, when we've completed our life's journey, the proper savings vehicle should allow our savings to blossom and transfer tax-free to our loved ones. The Power of Tax-free Savings There is only one vehicle in the Internal Revenue Code that accomplishes this. Under Section 72-e, your money accumulates tax-free under insurance contracts. Sadly, most financial advisors have no clue on how to structure an insurance contract to give you an internal, cash on cash, rate of return average 8,9, or even 10 percent. This is not just wishful thinking. These are actual rates of return that Doug has been able to enjoy over the last 7 years or so using a strategy known as indexing. E.F. Hutton is the firm that was the brainchild behind the emergence of this concept back in 1980. From 1980 to 1997, Doug averaged an 8.2% rate of return. That jumped up to over 10% once indexing and rebalancing was introduced. Remember, if you earn 7.2%, your money will double every 10 years. If you earn 10%, your money will double roughly every 7 years. Now consider the power of your money doubling tax-free. If you were able to save up a million dollar nest egg, that million dollars should be able to generate between $70,000 to $100,000 per year of tax-free retirement cash flow without depleting principal. Here's another way to look at it. In order to net $100,000 of tax-free income, you'd need $150,000 of withdrawals from a traditional IRA or 401(k). That's because state and federal taxes will gobble up nearly a third of what you withdraw. This means that people who have used a tax-deferred vehicle to save for their retirement are facing the uncomfortable thought of outliving their retirement nest eggs. They put their retirement money into tax-deferred IRAs and 401(k)s fully believing that they'll be in a lower tax bracket at retirement. This has not been axiomatic for some time now. If anything, people who have taken this approach are finding themselves paying the highest tax rates yet when they go to access their retirement money. The better retirement vehicle allows you to accumulate your money tax-free, to access it tax-free and without any strings attached, and will transfer tax-free to your loved ones at the end of your life. Learning how to implement these proven strategies isn't magic and it isn't a tax loophole. It does require a willingness to break from the crowd and learn what you don't yet know. Start by visiting with a wealth architect today.
