- Roths only have two benefits.
IUL LASER funds have those two benefits
and four additional benefits.
In this educational video episode,
I'm going to address IUL LASER funds versus a Roth.
I get asked this question all of the time.
Get ready.
I don't want you to forget how powerful
a max-funded index universal life insurance contract
structured correctly and funded properly,
a LASER fund,
knocks the socks off of a Roth IRA
or Roth 401k.
(upbeat music)
So my name's Doug Andrew
and I've been helping people prepare
for long term goals such as retirement
now for nearly five decades,
helping people accumulate their money tax free
not just tax deferred
and then be able to turn on tax free income.
And at the end of the day, when they die,
anything they leave behind blossoms,
increases in value and transfers income tax free.
Now right off the bat,
you ought to recognize IRAs and 401ks.
I'm talking about traditional IRAs or 401ks.
Do not do that.
Roths, do not do that.
So people will usually read one of my books.
I've authored 12 books thus far
and I've been very blessed they've been best sellers.
My passion is to give you insights
into opportunities
that maybe you didn't know existed before.
So when I go around the country
and I teach at live educational events
or on this three dimensional wealth channel,
I'm very passionate
about helping you understand what are the best ways
to optimize assets and minimize taxes
and bar none, my favorite financial vehicle
is a max-funded indexed universal life insurance policy
structured correctly and funded properly.
Then it is deemed a LASER fund.
LASER is an acronym that stands for
Liquid Asset Safely Earning Returns.
So on many of these episodes,
I talk about what is a LASER fund
and how do you structure it correctly.
You'll learn that you must structure it under three sections
of the internal revenue code
that had been around in one form or another now
for more than 108 years
that allows your money inside
of an IUL policy to accumulate tax free under Section 72E
and then you can access money, turn on tax free income.
A million dollar net stake can generate maybe
a hundred thousand a year of tax free income from age 65.
If you live to be 120 without depleting principal
based on actual history,
totally tax free under Section 7702
of the Internal Revenue Code
if you do it the smart way
and then at the end of the day,
whether you die at age 70 or age 120,
anything left behind blossoms
and transfers income tax free under Section 101A.
When I say blossom sometimes people go,
"What do you mean?"
I'm 70, if I died right now in an accident,
every million I would have in my IUL portfolios
would blossom to double that 2 million
and transfer tax free to my heirs.
And people say, "How much does that cost?"
It doesn't cost me anything, nothing's free
but it's being paid for with a minuscule portion of money
that most Americans shell out on unnecessary tax,
'cause where do they have their money?
In traditional IRAs or 401ks or Roths.
Okay, so let me briefly explain the difference
between traditional IRAs and 401ks and Roths
because if tax rates stay the same, there is no difference.
Many times I have told people, audiences
and on this channel,
if you were a farmer, let's say,
and if you had the choice of buying your seed
in the springtime that you're gonna plant
and you got a tax break,
you didn't have to pay tax when you bought the seed
and so you plant it, you irrigate, you cultivate
you work hard and in the fall you harvest your crops
and you sell your crops.
Now you agree to pay tax on what you sell your harvest for.
That's a traditional IRA or 401k.
You get a tax break on the seed money, on the contributions.
You put money into a 401k, that's pre-tax dollars,
you put it into an IRA that's tax deductible contributions.
You get a tax break on the contribution
on the seed money
and then it grows tax deferred.
But then when you go to access that money
in your golden years or whatever,
you now are harvesting your savings
and now you agree to pay tax.
That's a traditional IRA or 401k.
Well if you have the choice of just paying tax
on the price of the seed when you bought it
and it accumulated tax free
and that later on when you sold your harvest
you didn't have to pay tax,
would you rather do that?
I would because of a very big reason.
But what a lot of people don't understand is
there is no difference in either one of those scenarios
if tax rates stay the same, okay?
Because if you sell your harvest
and you get that tax free, I'll use an example right now.
Let's say that you put in over a time period
I'm just gonna super simplify this.
Let's say you put in $300,000 pre-tax
into a regular IRA or 401k.
Let's say it's earning 10% and you're age 60
and you're gonna retire at age 67
because if you're earning 10%
and most IRA or 401ks don't earn this,
but I'm gonna give 'em the benefit,
it's simple math.
10 into the rule of 72
means your money will double in 7.2 years.
Okay?
So if you put in 300,000 pre-tax
and it's earning 10% in 7.2 years at age 67
and a couple of months,
that 300,000 will have doubled to 600,000.
But now you have to pay tax.
So you have 600,000.
Now if it's earning 10%, that's 60,000 a year
but you pull out 60,000.
Most Americans between federal and state tax
are in a 33% tax bracket, okay?
You pull out 10% a year, your interest 60 grand
and you're paying 20,000 in tax,
a third in taxes,
you're netting 40,000 to buy gas and groceries,
prescriptions and golf green fees.
Does that make sense?
If you pulled out the entire 600,000,
you're only gonna net 400,000 basically, okay?
So only 400,000 of the 600,000
in the tax deferred IRA or 401k is your money.
See, the government,
Uncle Sam, has had a permanent tax lien on that account.
It's the best savings bond
that the government ever came up with for themselves.
They've been using you to accumulate money
for themselves also.
Okay?
Let's look at a Roth.
Now, if tax rates are the same,
you're taking after tax dollars.
So instead of having 300,000 on the front end
you only have a net of 200,000
'cause you had to pay tax of 33% on that contribution.
So you're only putting in 200
instead of 300,000 into a Roth.
Does that make sense?
If you're earning 10%,
that will double to 400,000 in seven years.
Age 67, you now have 400,000 tax free
and you start pulling out 10% a year.
That's 40 grand a year tax free.
Do you notice something?
It doesn't matter.
In the traditional IRA or 401k you're pulling out 60
and you're netting 40.
Out of a Roth, you're pulling out 40
and netting 40 'cause it's tax free.
It's the same.
It's the same 400,000.
Why?
Because I assume tax rates were the same.
Now most Americans get duped
into putting money into traditional IRAs or 401ks.
Guess what percent?
91% of Americans get duped
into putting money into traditional IRA or 401ks
because they're told they will likely be
in a lower tax bracket when they retire.
That has not been true.
Or actually amatic now for more than 30 years.
Savers are not in lower tax brackets.
In fact, most people who save in IRA or 401ks
they're actually killing their tax deductions.
They're going down the highway
with one foot on the gas pedal,
putting money in IRA or 401ks deferring
and the other foot's on the brake pedal.
They're paying off their mortgage,
they get rid of that deduction.
The kids are gone later on so you can't deduct them anymore
even if they move back with you
and business owners don't have those deductions anymore.
You're not contributing money to IRAs or 401ks
during retirement.
So you don't have those deductions
and Congress has been raising taxes, not lowering taxes.
So most savers are not
in lower tax brackets when they retire.
In fact, most people are in as higher, higher tax brackets
than they ever were during their earning years.
So the government says
because of irresponsible government spending
I'm talking about the general accountability office, okay?
Because of irresponsible government spending
and the printing of money
tax rates are gonna have to go up.
And so they will probably have to go up from 33%,
they say, up to 50 and even 67%.
Does that scare you?
If it goes up to 50%,
okay, now let's compare the two.
So if you have 400,000 in a Roth
and you have 600,000 in IRA or 401k
and it's only netting you 400,000 in a 33% bracket,
in a 50% bracket that 600,000
or 60,000 is only netting you 30,000
'cause you have to pay half in tax.
The 600,000 is really only worth 300,000
after Uncle Sam takes their portion.
Does that make sense?
If it's a Roth, it's tax free.
You're immune from higher taxes.
So you have 400,000 tax free
instead of 300,000 after tax.
You have 40,000 a year of income in a Roth.
Whereas you're only netting 30,000
in a traditional IRA or 401k.
So if you think taxes will likely be higher in the future,
which I do,
I can prove to you a Roth
will usually generate 50% more net spendable income
or the same amount of income for a lot longer
than the same amount of money in a traditional IRA or 401k
at the same rate of return because of taxes.
Now when people hear that, they go,
"Well then I should do a Roth."
Why should I take out one of your LASER funds, Doug?
A LASER fund accumulates tax free
and you can access the money tax free.
My Roth does that.
So what's the difference?
Here's the difference.
When you set up a Roth, you have to qualify.
If you make too much money, you don't qualify for a Roth.
Okay, did you know that?
In fact, they passed Roth in 1997
'cause the government was hard up for tax revenue
and they didn't wanna wait until people retired
to start taking money out of IRA or 401ks
to get their piece of that.
They needed money sooner than later.
So they had this idea,
"Oh smart people that realized taxes
will likely be higher in the future,
let's offer them a Roth conversion
where they can roll money over to a Roth
and pay tax now at today's lower rates,
which is smart for a lot of Americans."
That created a windfall of tax revenue for the government.
But see, they passed Roths
for the government's benefit, not for your benefit.
Now it was a step in the right direction
but maybe you've heard me say on this channel
or on the radio or TV that I've never owned an IRA or 401k.
Never will, you can probably surmise why.
And I've never owned a Roth IRA or 401k and never will.
Why?
Because of all the restrictions.
I make too much money.
I couldn't qualify for a Roth.
But even if I could qualify
you can only put in a certain dollar amount.
Now, first of all, what are the two benefits of a Roth?
Your money accumulates tax free
and you can take out the money tax free.
Those two benefits have been inherent
in insurance for 108 years.
Not since 1997.
We're talking about clear back in the early 1900s, okay?
It's been a sacred tax free cash cow for 108 years.
So I have those two benefits with a LASER fund.
What are the four additional benefits?
I started to mention one.
I can set aside 30,000 a year,
I can set aside 300,000 a year if I want into a LASER fund.
I just have to structure to do so.
You can't put in more than a certain dollar amount
or a certain percent of your income into a Roth.
What if I can put in 300,000
into a LASER fund and I only put in 30,000?
I can make up that other 270,000 anytime I want.
You cannot make up in a Roth.
If you don't use the room,
the little bit of room they give you in a given tax year,
you lose it forever.
You can't make up, okay?
Next benefit.
If I put in 300,000 into a LASER fund
and I need 200,000 of that a month later
for some business opportunity
or to buy a piece of real estate or whatever,
I can access that 200,000.
There's no tax, there's no 10% penalty.
If I were to have that much money in a Roth
and I touched that money in the first five years
before I'm 59 and a half,
there's a 10% penalty and I have to pay tax.
I don't want those strings attached.
I want to be able to access money whenever I want
even before age 59 and a half
without paying tax and without any penalties.
Okay?
What's the next benefit?
Indexing.
Roths are usually invested in the market
or maybe in a bank or credit union
and that's pathetic.
Rates of return of 1 or 2%.
In an indexed universal life LASER fund,
I get to use indexing.
It's not an index mutual fund.
You can search on this channel
and learn about the difference.
My money is not at risk in the market
but when the market goes up, I benefit.
I get to earn a rate of return,
some years as high as 16%, 25%, 61%
even 158%
like March of 2020 to March of 2021 .
I get to benefit by linking my returns
to an index when the market goes up.
But if I guess wrong in the market crashes
I do not lose one dime of my principal
due to that market downturn.
I may not make much of anything that year, but I don't lose.
And any year I make money
that becomes newly protected principal.
I lock in that gain and reset.
I never lose in future years money I made in past years.
That's indexing.
Roths do not offer that.
What's the last and sixth benefit
of a max-funded index universal life, a LASER fund?
The death benefit.
If if I die right now
and I have a million, it blossoms to 2 million.
There's not a Roth around that will double
what I have in there the moment I die
and pay it out tax free to my heirs.
Nope.
And people always say,
"Well, again how much does that cost?"
Well, nothing's free, but it doesn't cost me anything.
It's being paid for with a minuscule portion of money
that most people shell out in unnecessary tax
by following the herd and putting their money
into traditional IRA IRAs in 401ks or even Roths.
Why would I mess around with those qualified plans?
I don't like the strings attached.
So that's the difference.
If you want to learn more about how to structure
and how you can qualify for your LASER fund,
claim your free copy of this book
by going to laserfund.com
or click on the link below.
You contribute a nominal amount
towards the shipping and handling
and I'll cover the rest of that cost
and I will pay for the book.
This is 300 pages.
I'll fire it out to you.
If you're a left brain learner, you'll love this side.
This is about 200 pages, 14 chapters with all the charts
and graphs and explanations.
If you're more of a right brain learner,
you learn by stories and examples,
you flip over to this one.
This is about a hundred pages, 12 chapters
with 62 actual client stories of how the LASER fund
is the dream solution for all kinds of goals,
not just as an alternative to an IRA, 401k or a Roth.
You can use this for college funding,
for real estate management,
for working capital for your business,
for an emergency fund.
It's like a financial Swiss Army knife,
has a lot of different uses, okay?
So claim your free copy
and while you're in there, there's options.
If you like to listen and learn, watch and learn,
check out some of our regular educational webinars
that we do at no charge.
You can even plug yourself in for a a one on one appointment
over the phone or zoom or go to meeting
with an IUL specialist that I've trained
that will help you see some illustrations,
no cost, no obligation
on how a LASER fund may benefit you.
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