Roth IRAs and 401(k)s only have 2 advantages.
Get 6. In this episode, I'm going to address the question,
"Can I invest in a Roth IRA after retirement? Well, the short answer is yes
you can but i would not recommend it, learn why.
So, I'm Doug Andrew. I'm a financial strategist.
I've been a retirement planning specialist for more than 46 years. I've
written 11 books talking about how you can optimize your
financial assets, minimize taxes and empower your authentic
wealth. Well, this particular question has been asked many many times. And so,
the short answer, can you invest in a Roth IRA
after retirement is yes. But I said I wouldn't recommend it.
Why would you want to do that? Now, again when you fund a Roth you do it with
after-tax dollars, Roth IRAs and then later 401(k)s.
But they were first introduced in 1997 under the Taxpayer
Relief Act. And senator Harry Roth came up with
the idea, "Hey! People are getting smarter, they're
realizing that if you put money in a traditional IRA
401(k) with pre-tax dollars and defer and then take out money in retirement
they're not in lower brackets anymore. People are getting smart savvy, people
don't want to do that. They'd rather pay tax
on the seed money, the contributions and accumulate the money tax-free
and later access it tax-free because if you think taxes are going to be higher
in the future that's way better than a traditional IRA or
401(k). I can prove that all day long. He didn't
do it really for us. It's because the government was hard up
for money, it was for them. And so, he says, "Let's dangle a huge
carrot out there to the American public. If you want you can convert to a Roth
and if you do that it triggers tax. So, you're paying the tax and
then it's accumulating tax-free and later it's going to be tax-free when you
take it out. That triggered tax revenue for the
government. Now, it was for them not for us but i'm not
saying it wasn't a good idea for some people. But I've never owned a Roth, never
will. And so, here's why especially if you're
retired if you're asking the question, "Can I
invest in a Roth IRA during or after I've retired?" Yeah
but what are you trying to accomplish. If you're trying to put in some after-tax
money and then have it accumulate tax-free
and take it out tax-free those are the only two advantages a roth has.
I think you ought to consider what many savvy CPAs and tax attorneys refer to as
"The rich man's Roth." And you don't have to be rich to have one of these.
You want to know what it is? So, as I indicated
Roths allow you to fund it with after- tax dollars but the two advantages you
accumulate your money tax-free and later on when
you access the money hopefully it will be tax-free.
Now, people say, "Hopefully? You mean the government could change this?"
Yep, they've been known to do all kinds of things like that.
The last time was in 2008, most Americans don't realize
how much trouble we were in in this country. It's why David Walker, the
comptroller for the General Accountability Office resigned because
he wanted to tell the american public how much trouble we were in financially
in this country. The Obama administration wouldn't let
him do it so he resigned. And so, what happened in that downturn
Australia had their equivalent of a Roth and they said, "Hey, we were just kidding.
We need the money more than you do and so
we're going to determine if you have more money in
your Roths than we think is necessary. It was like a hundred thousand or more.
We're going to go in tomorrow and deduct 20% of whatever out of everybody's Roths.
That is your tax now." So, they can change. You can't believe
how close the Obama administration came to doing that thing
or being prepared to do it. So, I don't like the strings attached
with qualified plans like that. But my favorite vehicle for years is
what many savvy CPAs and tax attorneys refer to as the Rich man's Roth. Now, you
don't have to be rich to have this but see the rich can't own a Roth, they
make too much money. That's why I would consider a Maximum Funded
Indexed Universal Life Insurance contract that's
designed and structured for living benefits, tax-free living benefits
for retirement, college funding. You don't have to use it
for retirement, there's no strings attached.
In other words you don't have to wait until you're 59 and a half, if you want
to start taking out tax-free income. You don't have to start taking it out at
age 72 in order to avoid a 50% penalty. There's
no Required Minimum Distributions or anything like
that. I don't like all those strings attached.
My favorite vehicle is a Max-funded Index Universal Life which I call the
LASER Fund, my most recent book is titled that. LASER,
L-A-S-E-R is an acronym that stands for Liquid Assets
Safely Earning Returns. And so, I want my money
liquid, I want it safe, I don't want to lose money due to market volatility.
Most IRAs and 401(k)s and Roths are in the market
you shouldn't have your money in there when you're you know retired especially
after you've retired. You need predictable income.
And so, when I put money into a laser fund it's liquid, safe, it earns
predictable rates of return, I've averaged 10 percent for the last 25
years, 10.07 to be exact. And that's tax-free, that's net after all
fees and costs of the insurance that the IRS says has to be there in
order for it to qualify to be tax-free in the
Internal Revenue Code, okay? The LASER Fund has 4
advantages that Roths will never have, are you ready?
I'm going to disclose them to you right now. So,
what i call the LASER Fund has the 2 benefits
of Roth and they've been around a lot longer than Roths have. Roth came out in
1997. The LASER Fund, max-funded tax free
accumulation access and transferability of money
inside of an insurance contract has been protected in the Internal
Revenue Code for over a century in section 72e, 7702 and 101a of
the internal revenue code. Those 3 sections are what allow you
to accumulate your money tax-free, access your money tax-free, take out
income tax-free for life and when you ultimately pass away
it blossoms in value and transfers income tax-free.
Let's say I have a banner year in my business and I want to
deposit 300,000 dollars into my LASER Fund.
I can do that if I structured it to accommodate that much money.
You cannot do that with a Roth. You're restricted
based on a percent of your income or a dollar amount. If I design it to hold up
to 300,000 and I only put in 30,000, one tenth
that. No problem. I could have put in another
270,000. I can do that in the second, third, fourth, fifth year
and future years. I can make up for room I didn't use you can't do that with the
Roth. Once the tax year is gone you cannot make up
for what you could have put in in previous years. So, it has far more
flexibility. But here's the big one, if i put 300,000
into my LASER Fund and 30 days later I need
250,000 back out to use for my business or whatever
emergency, real estate opportunity. I can do that.
There's no penalties. I can access money at any time for any reason.
You have to wait 5 years or till you're 59 and a half, you can't do that with a
Roth. With the LASER Fund, I can link my
returns to an index. Indexing allows me to participate
in the market indirectly without my money at risk
in the market. That means if I link it to the S&P
or the Dow Jones my money's not invested in the market in the Standard
Poor's 500. Whatever the S&P does, the insurance company must pay me
up to a cap. I have earned like in 2017, I earned 16% on some I earned 25%
on others. But in years where the market crashes I don't lose.
Because my money's not in the market. I may not make anything that year but I
don't lose. And so, my average returns have been in
excess of 10% net cash on cash
using the LASER Fund totally tax-free. The last benefit is going to blow you
away. So, the sixth advantage number four uh in
addition to the 2 that come with a roth is that when I finally die
because none of us are getting out of here alive.
I mean not out of this video, I mean out of this life.
And so, when I pass away the only instrument in the Internal Revenue Code
that allows you to accumulate your money tax-free and then be able to access your
money tax-free but when you ultimately die it blossoms
it increases in value instantly and transfers income tax-free
is a LASER Fund. A Roth will never do that. On that last
point, let me use an example. I'm 68 right now
if I died in an accident tomorrow. Every million that I would have in my
portfolio of LASER Funds would instantly blossom to two and a
half million and transfer totally income tax free to
my wife, my kids, church, charities, Boy Scouts, the Red
cross whoever I want to leave it to. There's not a Roth around that will
blossom and transfer tax-free. And people say, "Well, how much does that
cost?" The way that I structure mine? Nothing. Now, it's not free nothing's free
but it's paid for out of a miniscule portion of money
that would otherwise go out the window in unnecessary taxes where most people
put their money. So, in summary I love the LASER
fund for retirement planning, you could put
money into a Roth but why would you when you can have the 2 benefits of a Roth
and 4 additional. I can put in large lump sums, I can make
up for years that I didn't put in the full
amount that i could have put in, I can access money at any time for any
reason, I can use indexing and participate when
the market goes up and not lose when the market goes down
to create predictable cash flow payouts of 8 to 10 percent a year
if i live to be 120 and when i ultimately die it blossoms and transfers
income tax-free. So, that's why I prefer the LASER Fund.
Now, if this is intriguing you, my most recent book, book number 11 is
called the LASER Fund, these are flying off of our warehouse shelves.
This is actually 2 books in 1. This one is 200 pages 14 chapters, charts
graphs, explanations. This side is about 100 pages, 12 chapters
with 62 actual client stories. So, if you would like
to claim your free copy I'll buy the book you just simply pay 5.95 shipping
and handling. And I'll fire one out to you I'll pay
for the book. You go to LASERFund.com, LASERFund.com.
There's also options there if you prefer to listen and learn or watch and learn
and you can get video and audio formats also. So, here's to
your brighter future, learn what you can do better.