- Here are four stories of school teachers,
a real estate landlord, and some physicians
that saved a boatload of unnecessary tax.
In this episode, I'm going to address real life stories
of IUL owners that saved 250,000 up to 1.2 million
of unnecessary tax.
(upbeat inspiring music)
So, I'm Doug Andrew.
I've been helping people optimize assets
and minimize taxes now for north of 48 years.
My favorite instrument to do this is with max-funded IUL,
which stands for index universal life.
But having said that, there's a lot of IUL policies owned
by Americans out there that are not structured correctly
or funded properly to accomplish what I'm about
to talk about.
Unfortunately, I would say over 99%
of IUL policies will not be a superior capital accumulation
tool as much as they could have been if they had an advisor
that was proficient.
Meaning throughout 40 years,
ever since 1980 when these were first introduced
by EF Hutton, universal life,
and then in 1997, index universal life,
I have averaged 9.6%.
But the last couple of decades, since indexing came out,
there are many, many 20 year periods I have averaged
over 11, netting 10.
Unfortunately, a lot of IUL policies, if they earned 11,
they only net six
or seven because the advisor did not know how
to structure them correctly.
And that is gonna be very significant over the long term
to only earn 6% net when you could have earned 10% net,
compounded annually.
This is huge, okay?
And so a lot of times when I meet people,
they are way too top heavy in what I call the yet
to be taxed IRAs and 401ks investment bucket.
Unfortunately, most Americans have most
of their retirement resources in IRAs and 401ks
in the market, and they come to me at retirement.
I recommend they come in at least five years
before retirement, but I look at it and I go, oh my heavens.
What are you thinking?
And they go, why, what did I do wrong?
I'm going, well, yeah, you're like a lot
of people just following the herd putting money
in tax-deferred IRAs or 401ks.
I'll bet you, your advisor and your CPA said, yeah,
keep deferring tax until retirement.
You'll likely be in a lower tax bracket then.
Did you hear that?
Now, they should have recognized that you're a saver,
and you are not gonna be in a lower tax bracket
for several reasons.
A lot of savers end up with a lot of money
that would maintain the same lifestyle
or a better lifestyle than they had
during their earning years.
And if you've accumulated any type
of a respectable retirement nest egg,
most Americans are in as higher,
higher tax brackets as they've ever been in,
and Congress keeps raising taxes.
They keep eliminating deductions,
and you've been killing your deductions paying
off your house.
The kids are gone, or if they're not gone,
if they move back, you can't deduct them anymore.
If you were a business owner,
you don't have those business deductions anymore,
and you're not contributing money to IRAs
or 401ks in retirement.
You don't have those deductions anymore.
So, even if you had less income, you're paying as much
or more in tax 'cause you don't have any deductions anymore,
and Congress keeps eliminating them.
So, this is why a lot of people just are shocked,
and then they have their money in a volatile market,
and then the advisor says, well, if the market drops 30
or 40%, which it does every several years,
they just tell you, oh, just hang in there.
The market always comes back eventually.
Well, people don't want to take money out of their IRAs
or 401ks when the market is dropping 30 or 40%,
but they can't just stop.
And so this is what depletes their nest egg faster.
You need to eliminate the dangers of taxes, inflation,
and market volatility.
The best way to do that is to convert your money
into vehicles or a portfolio that are totally tax free.
That where inflation will help you, not hinder you.
You will link your returns to the things that inflate.
You'll earn a rate
of return greater than the inflation rate,
and you're immune from market volatility.
When the market goes down, you don't lose.
When the market goes up, you get to benefit,
but your money is not at risk in the market.
That is accomplished with a max-funded IUL policy.
If it's structured correctly and funded properly
it qualifies to be called a LASER fund.
'Cause LASER means liquid assets safely earning returns.
Okay?
So, many times I have
to help people who have too much money trapped
in IRAs or 401ks.
So, in my book I actually give real life stories,
and some of my favorites are the school teacher,
the real estate landlord, and the physicians.
I tell the story in the book I want to gift you at the end
of this episode, and by the way,
if this is resonating with you, be sure and subscribe,
click like, post a comment,
share this video as somebody who ought
to learn this information, but stay with me
to the end because I want to gift you a copy
of a 300 page bestselling book called "The LASER Fund."
So, in the book are these stories.
I had a husband and wife, both school teachers,
that came to me years ago.
Their advisor told them to continue to defer the money
in their 401ks and their 403bs
until they were age 70 and 1/2.
Now the age is age 72, but back then,
they didn't have to take any money out
until they were 70 and 1/2.
And then you must start taking out money.
They're called RMDs, required minimum distributions
to avoid a 50% penalty.
I didn't say 15.
50% penalty by the IRS.
See, the government wants you to take that money
out so they can tax you before you die.
And then they'll tax you again when you die.
It's ridiculous.
Most IRAs and 401ks are the best savings bond
the government ever came up with for themselves.
And so they came to me and they were 59 and 1/2,
and I said, if I were you I'd get your money out
of those 403bs and 401ks, that TSA, in the next five years
and get the taxes over and done with sooner than later.
And they went, ugh, we'll have to pay tax.
I'm going, you're gonna pay it sooner or later.
I said, let me just show you.
I had software that showed them
that if they waited till they were 70 and 1/2,
and then took out required minimum distributions,
out to their life expectancies,
they would pay a quarter of a million dollars in tax.
They only had a quarter of a million at that time.
They went, really?
I go, yeah.
I said, if we get it out in the next five years,
we'll pull out like 60 grand a year,
and you'll only pay 12,500 a year times five years,
you'll pay 60,000 in tax.
Now, instead of 250,000 in tax by pushing it off, deferring,
I said, what do you want to do?
Oh, well, it'll hurt, but yeah, I guess that's smart.
I go, yeah.
It's like the old Fram and Autolite commercial,
where an automobile mechanic used to hold up
on TV an oil filter, and he'd say, you can pay me now,
and I'll change your oil filter,
or you can wait and pay me later,
and I'll replace your engine.
Yeah, you wouldn't believe how many people do that
with their retirement engines.
Okay?
So, they did it.
Long story short, in five years we not only got it out
at 60,000 of tax instead of a quarter of a million,
but I was able to use other strategies to offset the tax,
and we got it out tax free.
At the end of five years, I had saved them a quarter
of a million of unnecessary tax,
which we added to their LASER fund.
That has generated between 16,000 to 24,000
of tax free cash flow, that would've gone down the drain
in unnecessary tax that has allowed them to take their kids
and grandkids on cruises, family vacations with a purpose,
that they wouldn't have been able
to do had they just paid tax.
They are so grateful for that.
I had a real estate landlord, and his advisor said, listen,
leave your 600,000 in these 401ks.
Well, he had to start taking required minimum distributions,
and so the advisor said, take the RMD.
That was 24,000.
He had to pay tax of a third, eight grand,
on that to net 16,000.
It was pathetic.
In five years, we got out that $600,000,
and while we did it, it grew to 750,000.
We offset the tax by resurrecting some deductions
on his rental properties.
Okay?
The story is in my book, that I want to gift to you.
Long story short, at the end of five years,
he ended up with 750,000 tax free.
He was earning 10%.
What's 10% on 750,000?
75 grand.
75,000 a year tax free compared to 24,000 taxable income out
of his IRAs and 401ks.
We more than tripled his income.
He was so grateful,
and we saved him that three quarters of a million
of unnecessary tax.
We do this all the time.
The last story is the husband and wife
that were both physicians.
They had accumulated 4.6 million in their IRAs, 401ks,
and their advisor said, oh, well, you know,
you are gonna now have to pay tax,
but you can do required minimum distributions.
Same old story, and I showed them that at a minimum,
they would pay 2.6 million
of tax if they followed their advisor's advice.
You know what their advisor said?
They can afford to pay 2.6 million.
I said, well, let's ask them.
I said, I know I can save at least 1.2 million.
I can't save all 2.6.
You've unfortunately painted yourself into a tax trap here.
But would you like to redirect 1.2 million
of unnecessary tax to a family bank is what I call it?
Absolutely.
So, in five years we did that.
They now have 1.2 million of otherwise payable tax
in an IUL policy that is generating 100,000 a year
of tax free cash flow for them, their kids, their grandkids
(button clicks) into perpetuity,
(bell dings) to help them
with their college funding and all kinds of goals.
We do this all the time.
We have a couple in California we took
from the highest tax bracket in five years
to a 0% tax bracket.
I usually recommend that you get 40 to 60% of your income
to not show up on your 1040 tax return by putting it
over into IUL.
The IRS will know you're receiving it,
but they'll know it's tax free.
I've taken many people from a $200,000 taxable income down
to an 80,000.
They're still getting 200,000,
but 120,000 of it is tax free coming out of IUL policies.
We do this all the time.
This couple, they said we want 100% of our money
to be tax free.
So after paying tax, they ended up with a net of 4 million
out of their IRAs or 401ks.
That grew by double to eight million in seven and 1/2 years
at 9.6% average return,
and they've had 8 million now generating 600,000
to 800,000 a year of tax free income.
They only need 300,000 to live on,
and they don't even have to pay tax on that.
We do this all the time.
So, this is how you can learn to do this.
Read the stories.
The book that I've been referring to has been flying off
of our warehouse shelves.
It's called "The LASER Fund," how to diversify
and create the foundation for a tax free retirement.
And you will learn about these four buckets in here
and the most underutilized
and misunderstood is the tax free one.
I'd recommend you get 40 to 60% of your income
to not even show up on your 1040 tax return.
So, how do you claim your free copy?
Simply go to laserfund.com.
L-A-S-E-R fund.com.
Click on the link below.
You contribute a nominal amount
towards the shipping and handling.
I cover the rest of that, and I'll pay for the book.
I'll fire out a hard copy to you.
This is 300 pages.
200 pages of charts and graphs and explanations,
the other 100 pages when you flip it
over are 62 actual client stories like I've just told you.
This is right brain left brain.
If you want to use your whole brain read both books, okay?
But I will fire out a copy.
There's also options there if you'd rather listen and learn,
audio, or watch and learn, video.
There's even an 18 hour video masterclass,
but you can also check out our webinars
that we teach regularly.
And I can point you to the advisors who understand how
to implement this correctly.
Because this is about your brighter future,
and I don't want you to outlive your money and continue
to pay unnecessary tech the rest of your life
by following the traditional financial advice given
by the financial services industry, escape from that.
(lively music)