Good, better, best, never let it rest. Never let it rest till good gets better
and better gets best. In this episode, I'm going to address the question. What are the best
ways to save for retirement? It's probably not what you think. Get ready. Put on your seat belt.
So, my name's Doug Andrew and I've been a financial strategist and a retirement planning specialist
now for north of 48 years. Helping people all over America and frankly and many parts of the
world prepare for a comfortable retirement so that they will not outlive their money. I have
discovered that there are three big dangers that cause most retirees to outlive their money in
retirement taxes, inflation, and market volatility. So, the strategies that I would employ for my
clients were designed to eliminate those three dangers. Now, my favorite vehicle to accumulate
access and transfer money tax free is what I call the laser fund.
Laser is an acronym that stands for liquid asset safely earning returns. So, as we get ready to go,
I'm going to use a metaphor here that I'm going to call the million dollar dash. This is like a
race track where we are racing to try to achieve a million dollars net after-tax, after fees. Net of a
million dollars that can generate hopefully eighty thousand to a hundred thousand dollars a year of
income that will last as long as you do. So, let's go on this million-dollar dash and I'll talk about
how you can get there by sprinting instead of crawling walking or just jogging. So, as a
financial strategist and a retirement planning specialist I've been very honored grateful that
I've authored 12 books so far. I've spoken all across America and I've written a lot of articles
that have been published in major newspapers throughout the country. This particular article
was read and printed several hundred times. It was titled retirement savings alternatives and this
is where I would use this metaphor of running this million dollar dash and there are ways that people
crawl okay and they walk they jog with the wind of the back at the beginning or the end of the race.
But I would recommend you sprint towards the finish line. So, let me give you the nitty-gritty
of what this article was talking about and I'm going to use this illustration here on the screen.
There are four phases of retirement planning. The contribution phase where we contribute money
towards usually savings accounts like maybe IRAs and 401ks is the typical repository for a lot
of Americans. There's the accumulation phase where it's hopefully growing with interest or dividends.
Unfortunately, a lot of people don't accumulate the money very fast because maybe their IRA
is at a bank earning less than one percent. But then there's the distribution phase and that's
where you're going to start taking income out or distributions and then there is the transfer
phase. What's that? Well, a lot of people end up leaving behind something when they die that would
have sustained them had they lived longer and oftentimes people don't realize the worst place to
leave money when you die is in an IRA or 401k. Most savvy CPAs will agree with me on that. So, a lot of
times we ask people what are the most important phases here or what is the most important phase?
And a lot of times they'll say, "Well, accumulation or they may say the distribution".
It really has to do with what are you doing this for? What is the end goal? The end goal is to have
income that will last as long as you do. Let's go through five different savings alternatives in
America and we're going to analyze it in all four of these columns to see which ones are poor, fair,
good, better, or best. Are you with me? So, here we go. The first type of investment is the most
common in America and it's the worst place to save money. It is what we call taxed as earned
investments. This would be money typically in banks credit unions or maybe even mutual funds. But
what's happening is you're crawling around this racetrack, why? Because you're contributing after
tax dollars. You're earning money. You're paying tax on that and then you're taking after-tax dollars
and you're putting it into a bank or a credit union or a mutual fund and guess what? You're
being taxed as it accumulates on the interest and the dividends every year on your 1040 tax return.
This is not smart and yet many Americans do this way more than they should and then any time
you start taking out distributions you're taxed on any of the gain or the capital gains that you
haven't realized and when you die anything you lift leave behind is possibly taxed as
you transfer it especially to non-spousal heirs. Tax... in all four phases.
It's like crawling and I can prove this to you mathematically which I'll do here in just a moment.
The next type of method would be to take after tax money and putting it into a tax-deferred
account maybe like an annuity. This is where you're taking after-tax dollars you're putting it into
an account where it's tax-deferred. But if you start taking money out of that it's now taxable
and it's taxable lifo that means last in first out. That means that if you put 500,000 into an annuity
and let's say it's earning 10% which most don't earn. Theoretically, you should be able to
pull out $50,000 a year without depleting principle. Well, that 50,000 is the last money you're earning
the interest according to the IRS and it's 100% taxable. That's lifo, last in first out. This is
the worst way to be able to save after tax dollars besides this one that you pay tax on
all the time. This one's only tax-deferred as soon as you start accessing the money it's taxable lifo
and when you transfer it. There's only one green circle so to speak, okay. That's like walking around
the racetrack mathematically. Now, you're probably familiar with accounts like IRAs and 401ks.
When IRAs and 401ks were first introduced the original premise was oh get a tax break on the
contribution be able to deduct it or put in pre-tax dollars during the contribution phase.
Accumulate that money tax-deferred and then when you retire you'll pay tax because you'll
be in a lower bracket. Well, that has not been true or axiomatic for more than 30 years now.
Most people who save very much money are not in lower tax brackets when they retire because
usually they've been killing their deductions along the way and if you accumulate any type of
a respectable retirement nest egg you will not be in a lower bracket. So, let me show this to
you mathematically before I illustrate that. If we took a dollar and we doubled that dollar 20
times, okay. So a dollar doubles to two dollars and then two doubles to four, eight, sixteen, thirty two.
After twenty periods it'll be worth a million forty-eight thousand dollars.
That's what it would be worth if it was tax free the way I like to accumulate my money.
But if you were to pay tax as you go taxed as earned the crawling around the racetrack method.
In a 25% bracket over here you put a dollar in it doubles to two dollars you pay tax of 25 percent.
25 cents you have a buck 75 that doubles to 350 you pay tax on that, guess what? You'll only have
72,000 instead of a million at the end of the same 20 periods. That's in a 25 bracket. Many people in
America pay about a third in taxes between federal and state tax. In a 33% bracket, you'll
only have 2.7 percent of a million 27,000 that's why I say it's like crawling around the racetrack.
Now, when you put money into those type of accounts again that is like crawling or walking
people put money into traditional IRAs or 401ks because they're told, "Hey, I want to
get a tax break on what I contribute", now if you're a farmer and you have the choice
of buying your seed in the springtime and you didn't have to pay tax on the price of the seed
but later on, after you plant you cultivate you irrigate you work hard all year then you harvest
your crops in the fall and now you agree to pay tax on what you sell your harvest for?
That's a traditional ira 401k. When I ask people would you rather have a tax break on the seed and
have to then pay tax when you sell your harvest or would you rather just pay tax on the price of the
seed and enjoy the harvest without tax? They think I'm talking about a Roth. I could be but I've never
owned an IRA 401k never will. I've never owned a Roth ira form okay and I never will. Because I
want the best. Now, before I go into an explanation of traditional IRAs of 401ks. If this is resonating
with you and you can think of somebody that ought to view this click share, post a comment, click like.
But most importantly subscribe and it's free this is three-dimensional wealth and click the little
bell because then you'll be notified every time I post an answer to a financial question which I do
almost on a daily basis. But stay with me to the end because I want to gift you a copy of
my most recent 300-page best-selling book called the laser fund, okay. Let's go back to this. In a
traditional IRA or 401k you're using tax-favored contribution dollars and it's accumulating tax
deferred but then you agree to pay tax during the distribution phase and during the transfer phase
and truth be known if you save very much money you will not be in a lower bracket. I can prove this to
you mathematically people are shocked because of the amount of money they pay in tax on the back
end during the harvest. So, in 1997 the government was hard up for tax revenue and they didn't want
to wait around for people to start taking out their distributions required minimum distributions
at that time was age 70 and a half. Now, you can wait till you're a get 72 and then you must pull out
the required minimum distribution or there's a 50% penalty. The government wants that money out and
taxed so that they can tax it again when you die but they are looking forward to that. When they
were hard up for revenue in 1997 senator Roth said, "I have an idea, some people are getting smart and
realizing that they're not in lower tax brackets. So, let's introduce where they can contribute
after-tax dollars and they can even convert or roll over a traditional IRA or 401k to a roth
and now they're contributing with after-tax and will accumulate tax-free
and they can access it tax-free." But I mentioned i've never owned a Roth and I never will.
See ,my favorite vehicle is a max funded tax advantage section 101a alternative. Section
101a has been in the internal revenue code for 107 years. It is what I call a laser fund. It allows me
to accumulate access and transfer my money tax free. That's why I wrote a book about it so you
can learn and not miss out. You contribute after tax dollars but you get three green circles. It
accumulates tax-free you access money tax-free. If you live to be 120 a million dollars can generate
a hundred thousand a year of tax free income for the rest of your life and when you ultimately die
anything left in there blossoms increases in value and transfers tax-free. What that means, I'm 69 if
I died in an accident tomorrow every million I would have in my laser fund would blossom to about
two and a half million and transfer-tax-free. There's not a Roth around that will do that.
So, this has three green circles. Now, in my books I actually show people how to have their cake
and eat it too. I won't go into that in detail you can study it in my gift I'm gonna give you.
But this is four green circles. I can show you how to resurrect or maintain the best tax deductions
on the front end indirectly and still accumulate your money tax-free access it tax-free and when
you diet blossoms and transfers tax-free. Here's the message, three green circles is better than
two one or none but here is maybe good. I used to say traditional IRAs or 401ks
are a good way to go. Now, I think they're a far cry from that. Roths were better but frankly
three green circles is better than two that's why I choose this one because of the tax-free transfer.
But four green circles is best. Good, better, best, never let it rest. Never let it rest till good gets
better and better gets best. That's my motto. So, folks, if you want to learn how you can do this
I would recommend you study this book to claim your free copy simply go to laserfund.com...
You contribute a nominal amount towards the shipping and handling and I'll cover the rest
of that. Now, this is actually two books in one let me explain. This white covered side is about
200 pages 14 chapters with all kinds of charts and graphs and explanations for the left brain learner.
If you're a right brain learner you learn by stories and examples, you flip it over
this is a hundred pages 12 chapters with 62 actual client stories. So that you can learn how to
diversify and create the foundation for a tax-free retirement by listening watching learning about
other people who have done this. So, claim your free copy of the laser fund I'll fire out a copy
to you and there's also options there to listen and learn and watch and learn even an 18-hour
master class on how you can implement these strategies. Here's to your brighter future.