- Don't use one size fits all advice
for your retirement dollars.
In this episode, I'm going to address why IRAs
and 401ks are such a poor way to save
for retirement for most people.
(gentle music)
I'm Doug Andrew and I've been a financial strategist
and retirement planning specialist now
for nearly five decades, helping thousands
of people prepare for a comfortable retirement
so that they will not outlive their money.
Unfortunately, a lot of people in America I think are duped
into putting money into traditional IRAs or 401ks,
invest it in the market and they hit retirement
and they have this rude awakening, okay?
They're not in a lower tax bracket
especially if they've saved very much money.
The only people that I've found that are
in lower tax brackets when they retire
are those that didn't save very much money
and they've been killing their deductions along the way.
They pay off their house,
they don't have that mortgage interest deduction anymore.
The kids are gone.
If they're not gone, if they move back in as adults
you can't deduct them anymore.
You're not contributing money to IRAs or 401ks
and so you don't have those deductions anymore.
If you're a business owner,
you don't have those deductions anymore.
And Congress, because of irresponsible government spending
the printing of money consistently raises taxes
to cover that deficit spending.
And so I have found that it's amazing
why so many people continue to contribute money
to tax deferred IRAs or 401ks when it has not been true
or axiomatic that people are in lower tax brackets.
91% of Americans in fact, continue to put money
into tax deferred IRAs or 401ks.
Only 9% are smarter and they go ahead
and pay tax on the contributions they make
into tax deferred Roths, okay?
And enjoy tax-free income during their golden years.
Now, I've never owned an IRA or 401k,
never will because of obvious reasons.
And I've never owned a Roth IRA 401k
and I never will because Roths only have two benefits.
It's a step in the right direction.
But Roths were introduced in 1997
when the government was hard up for tax revenue
and the government didn't wanna wait
until people retired to start taxing their money.
And so they said, "Hey, a lot of people are getting smart.
Let's dangle a carrot out there to get some Americans
to do a rollover to a Roth
and we'll get a bunch of tax revenue," which they did.
And so Senator Roth said, "Well, name this after me."
These smart people who are savers,
they would rather just pay tax now
in today's lower rates and enjoy tax-free income later
and that created a tax revenue windfall for the government.
So the government did it for them, not for us
but it was a step in the right direction.
But why have I never owned a Roth and never will?
Roths only have two benefits.
You fund it with after tax dollars
but your money accumulates tax free
and you can access it tax-free.
I have been enjoying those two benefits
and for additional benefits
for over 108 years under the Internal Revenue Code.
I'm not that old, but it's been grandfathered
in the Internal Revenue code for 108 years.
But I've been enjoying this
for over four decades by using maximum funded
indexed universal life insurance contracts.
Now, Universal Life was introduced in 1980
but permanent life insurance has been tax free
for over 108 years.
But Universal Life allows you to be able to use insurance
for living benefits more than just for death benefit.
And then because interest rates started to come down
in the 1990s, indexing came out in 1997
which is a allows you to benefit
or participate when the market goes up
but not lose when the market goes down.
That's called Indexed Universal Life.
I'm not talking about index mutual funds.
So a property structured indexed universal life
insurance contract, if it's structured, collected
and funded properly is deemed a laser fund.
Laser is an acronym that stands for
liquid assets safely earning returns.
So it has those two benefits of a Roth,
it accumulates tax free
and you can access the money tax free
but for additional benefits that Roths will never have.
It allows you to be able to design it
to be able to deposit 30,000 a year if you want
or 300,000 a year anywhere and be whatever
based upon how you wanna structure it.
You cannot contribute that much money into a Roth.
In fact, if you make too much money,
you can't even own a Roth.
This is why savvy CPAs and tax attorneys referred to
an IUL policy, a laser fund as the rich person's Roth.
And I always snicker because you don't have
to be rich to have one.
You can set up a laser fund for 500 bucks a month.
But see, rich people can't own a Roth.
Now, if you designed one to accommodate $300,000 a year
'cause you're a business owner, you don't have
to put in 300,000, you could just put in 30,000 or nothing.
If you put in 30,000, you can make up
the other 270,000 anytime down the road.
In a Roth, you only have so much room.
If you don't use that room
in a given tax year, you lose it forever, okay.
The next benefit, if I do put in 300,000, let's say,
and 30 days later for some opportunity in business
or investment or emergency, I need 200,000 of that back.
I can access 200,000 out of my laser fund.
There's no 10% penalty by the IRS.
I can access the money.
I don't have to wait till I'm 59 and a half or five years
with a Roth, you have to wait five years to access money
or until you're age 59 and a half
or else they're gonna penalize you 10%, okay.
I don't like those strings attached.
With IUL, you get to use indexing.
You can't participate when the market goes up
and not lose when the market goes down
if you have your money in a Roth in the market.
So yeah, I get to benefit when the market goes up
and not lose when the market goes down by using indexing.
The last benefit of a laser fund
is when I finally pass away,
whatever is in the account blossoms
and transfers tax free to my spouse,
my kids, my grandkids when I die.
Right now, if I died, I'm 70, every million I would have
in my laser fund would blossom and transfer about 2 million.
It would double and transfer tax free.
And that just comes along for the ride.
People say, well how much does that cost?
Well, it doesn't cost me anything.
It's not free, but it doesn't cost me anything.
It's being paid for with a small portion of interest
that would otherwise go out the window when unnecessary tax
if I followed the herd and put my money into IRAs and 401ks.
So I've used this cartoon before
where here's this young person who starts out
in their first job and they just follow the herd
and they put money in the company's 401k or they get duped
into putting money into a tax deferred account being, oh,
you'll be in a lower bracket when you're retired.
91% of Americans are duped into doing that
and they don't read the instructions on the label, okay.
Caution, must wash with tax before use.
Yeah, when you retire, you're gonna have to pay tax.
Will shrink 33% or 40% or more.
And maker recommends being taken to the cleaners.
Yeah, too many people are taken
to the cleaners because if they do wash it, it shrinks.
And this one size fits all advice doesn't fit the lifestyle
of the retiree.
They outlived their money because their nest egg gets,
it shrinks from the million that they thought they had
is really only about 6 or 700,000 of their money.
It doesn't fit their retirement lifestyle.
It's not their money.
And this is the rude awakening that they come to.
So if you want to learn how to not, you know,
get duped by putting money into IRAs
or 401ks and seeing it shrink where it doesn't fit,
learn about what you can do better.
I want to gift you a copy
of my most recent bestselling book called "The Laser Fund."
This is flying off of our warehouse shelves.
Now you can go to Amazon and pay 20 bucks
plus shipping and handling, but I'll gift you a free copy.
You simply go to laser fund, l a s e r fund.com
or click on the link below.
And when you do this, you will be able to notice
that it's actually two books in one.
This white covered side is about 200 pages, 14 chapters
that has all the charts and graphs
and explanations, how you can learn left brain, okay.
If you're more of a right brain learner, you flip over
to this orange covered side from this one
and this will give you 62 actual client stories
of how the laser fund can be an incredible dream solution
for all kinds of financial goals, not just retirement.
So you simply go to laserfund.com
and you contribute a nominal amount
towards the shipping and handling.
I'll cover the rest of that cost and I'll pay
for the book and fire out a hard copy to you.
When you're in there claiming your free copy
if you like to listen and learn or watch and learn,
there's options there for a small charge
for the audio or the video version.
And also check out, we teach free educational webinars
on a weekly basis at no charge.
You can also schedule an appointment
at no cost or obligation with an IUL specialist.
But this is not about me.
This is about you and your brighter future.
I don't want you to outlive your money
by having an account or IRAs or 401ks that do not fit
because they shrink due to the negative impact
of taxes, inflation, and market volatility.
Make yourself immune from those.
(upbeat music)