- People have doubled, tripled,
even quadrupled their retirement income
by getting their money out of their IRAs and 401ks.
In this educational video episode,
I'm going to address how IUL, index universal life,
can provide more income longer than IRAs and 401ks.
Get ready, this may surprise you.
(upbeat music)
So I'm Doug Andrew, I've been a financial strategist
and retirement planning specialist now for 48 years
helping people optimize their assets, minimize taxes
and empower what I call their authentic wealth.
And in doing this people will always come to me
in order to make sure they do not outlive their income
in retirement.
And I have discovered that there are three big dangers
that cause most retirees to outlived their money,
rising taxes is the first danger.
The second is inflation
that erodes away the purchasing power
of those hard-earned saved dollars.
And then market volatility
if they leave their money in the market.
Well, this is where I am shocked
how many people would come to me,
maybe five years before retirement,
which I recommend that you seriously get together
with a retirement planning specialist
at least five years before retiring
because at retirement planning
is something totally different
than maybe what you did for retirement planning.
And many times I would notice
that they would have 60, 70, 80, 90%,
sometimes 100% of their retirement resources
yet to be taxed IRAs or 401ks in the market.
And I would go, "What are you thinking?"
And they would go, "Well, I've just been following the herd,
putting money into here."
And I go, "Well, you understand
that Wall Street was never designed
to create predictable income
or predictable cash flow because of the market volatility."
In fact, most broker dealers will tell their advisors,
"Don't you dare ever illustrate more than a 4% payout
out of a portfolio of mutual funds
with IRAs and 401ks," why?
Because, DALBAR who studies investor behavior says,
"The average retiree with their money in the market
is only averaging 3.49%
because they buy and sell at the wrong times."
If you bought and held and you didn't panic
when the market dropped down 25, 30, 30, 40%,
most people do panic and they say, "Enough already,"
and they sell low
and then they wait around to buy back into the market high.
That's why they only average about 3 1/2%.
If you bought and held, you'd probably earn 9.14%,
but you'd only net 6% after tax.
So a million dollar nest egg if you were earning nine,
you could pull out 90,000 a year theoretically
and not complete your principle,
but you're only netting 60,000 to buy gas and groceries,
prescriptions, golf, green fees, whatever, to live on.
But the average retiree, if you only pull out 4%,
which is what they want you to do
so that you will not sue them,
the broker dealers for you outliving your money,
that's only 40,000 a year.
And even in a 25% tax bracket
you're only netting 30,000 to buy gas and groceries
or 3% a year, that's pretty pathetic.
So many times when I would meet people
and they would realize, oh, wow.
See, if you ask on Wall Street
when is the best time to sell your mutual funds shares
or your stocks, they will say never.
Wall Street was never designed for you to actually sell
or liquidate because you have to time the market.
And when you need the money,
there were sometimes it's the hardest to get,
or you don't wanna sell when the market's down
and what have you.
And so it's not a good place to have your monies.
This is why many times I would advise people
to do a strategic rollout.
That's not a rollover,
a rollover is going from the frying pen of the fire,
so to speak, that's taking money in 401ks
and rolling them over into IRAs
and the money stays in mutual funds, nah.
And then many times if you don't need the money,
you defer until you're age 72
and then you start taking RMDs,
required minimum distributions,
which I think is the worst advice for many retirees.
You're not saving tax by stringing it out.
I have software that shows people, if you string it out
and take out required minimum distributions
throughout your life expectancy and your spouses
and then you leave behind to your children,
the IRAs and 401ks, the remaining balance.
And the children now can't leave it until they retire,
they have to get the money out in tax within 10 years
'cause the government wants that tax revenue.
It shocks people when they see the amount of tax
they will pay by stringing it out.
So I would show people how much they could save
by getting the taxes over and done sooner than later.
And then reposition that knit after tax money
into a portfolio of LASER Funds.
Now, what's a LASER Fund?
It is a max funded indexed universal life insurance contract
structured correctly and funded properly.
And it's where I have earned average returns
for the last 42 years,
as of the recording of this episode, of 9.62%.
Now, some years you may not make anything,
but you don't lose when the market goes down
'cause your money's not invested at risk in the market.
Other years you make money up to a cap,
maybe 12%, 16%, sometimes no cap.
And there are times when people have realized gains
that they've locked in of 25%, even 61%
and 158% from the year 2020 to 2021
after the COVID 19 pandemic,
30% drop in the market March of 2020.
A year later in March of 2021
many people with index universal life had received 61.33%
gains, even 158% using different strategies
with index universal life.
So let's just keep it simple and take it down
to an eight to 10% payout because most people
who own index universal life
structured correctly and funded properly,
they can usually get eight
to a 10% payout without depleting principle.
So let's talk about
how IUL can outperform traditional IRAs or 401ks.
If you could earn 12% in a mutual fund portfolio,
which I highly doubt,
you're only going to net after tax in a 33% bracket eight.
If you had a million dollar nest egg
and you're pulling out 120,000 a year at 12%
in a 33% combined federal and state income tax bracket,
you're gonna pay out 40 grand in tax
and only net 80,000 to buy gas in groceries.
Most of those asset managers charge 1% asset management fees
on the million dollars,
so you're really only netting 7% or 70,000.
Well, a max funded index universal life
can generate 80 to 100,000 of tax free income
and not deplete principle.
If you buy and hold in the stock market,
the chances of earning 12% really aren't realistic.
DALBAR says if you did that and you did not panic
when the market went down,
you might earn nine and net six, maybe only 5% after fee.
So a million dollars only net you 50 grand.
If you only take out the 4% rule
that the financial services industry want you to
because most retirees panic when the market goes down
until they only average three and a half.
So if you pull out 4%,
you're actually going to slowly deplete your nest egg,
but not before your life expectancy.
But you pull out 40,000 out of a million dollar nest egg,
you pay tax even at a 25% bracket
'cause maybe you're in a little bit lower bracket now
'cause you have such a pathetic income.
You pull out 40, you're netting 30,000 or 3%.
So what if an IUL could be structured to give you 9%?
Many years I've earned 11 and netted 10,
let's say you earned 10 and net nine.
You pull out 90,000 a year tax free.
How much more is 90,000 than 30,000?
That's three times as much, that's triple.
We've had many people who have actually had payout rates
of 10% and because of their taxes and so forth
they were only earning two and a half or three.
We have double, tripled, even quadrupled people's income.
So let me give you an actual story
that illustrates what I'm talking about here.
And this is one of thousands of stories
where we have helped people
dramatically increase their net spendable income.
We had a gentleman come to us several years ago
right after the 2008 crash.
And he had his IRAs and 401ks invested in the market.
And twice in the previous decade
he had seen his IRAs and 401ks invested in the market
drop down 40%.
So he had 600,000 when he came to us post 2009
and he saw that 600,000 in IRAs and 401ks drop down
under 400,000 twice,
2001 to 2003 it went below 400,000, down around 360
and then it came back to 600,000 by 2007
and it dropped 40% again in 2008.
And he actually had to wait
until 2012 before it came back up to 600,000.
So he came to us when he was back
to where he was 12 years earlier
with is money in the market and guess what?
His advisor said, "Oh, keep it in those 401ks,
we'll roll him over to IRAs.
And since you don't need the money,
just take RMDs, required minimum distributions,
and keep it in the market,
the market will always come back."
Well, he was fed up with waiting around 12 years
to recover what he lost twice in the previous 12 years.
So he was all ears
and so we showed him a strategic rollout.
What his advisor was telling him to do is take RMDs
because at that time he was 70 and a half
and that's when you had to start taking RMDs.
And the year that he came to us,
the required minimum distribution
on his 600,000 was like 24,000.
Now, he didn't need it,
but he pulls out 24,000 in a 33% bracket,
he had to pay 8,000 and a third in tax.
He was netting 16,000 out of the 24,000
to buy gas in groceries, that's pretty pathetic.
So he's netting 16,000 and his advisor says,
"Hey, maybe we can keep getting you 24,000 a year.
You're gonna have to take out a little bit more."
But that's where he was at when he came, what did we do?
Over a five year period
we strategically rolled out that 600,000.
We were able to reposition it
to where he was able to earn about 8 1/4%
during the rollout process,
as he got money out of those IRAs and 401ks.
And we pulled out 150,000 a year.
Now, some of his advisors said, "What?
You're sending him into a higher tax bracket."
Not by much,
you think his taxes are gonna be lower in the future?
I don't.
And so we wanted to get the taxes over and done
sooner than later.
So let's take the worst case scenario.
First, he pulls out 150,000 a year, times five years,
he actually ended up getting 750,000 out of his IRAs
because the 600,000 was growing
while we were doing the rollout.
He pulls out 150,000 a year,
he pays a third, 50 in taxes, netting 100,000.
That 100,000 net, we put into LASER Fund,
max funded index universal life policies.
At the end of five years he now has 500,000 plus interest,
but 500,000 in his LASER Fund.
Now, those LASER Funds were able
to generate at least 8% payout
and actually he was able to do 10% if he needed it.
What's 8% on 500,000?
40,000 a year tax free.
How much better is 40,000 a year of tax free income
than 16,000 after tax income on those IRAs and 401ks?
Yeah, two and a half times as much,
but he could actually pull out 50,000
because he was able to get a 10% payout.
He was actually earning 11 netting 10
for most of those years,
but we were able to resurrect some deductions.
He was a sort of a real estate landlord.
And so he had been paying off
some of his real estate properties
thinking that would be a supplement to his retirement.
We actually showed him
how to resurrect some of those deductions
and use his real estate properties and leverage
and borrow money at 4 1/2%, a net cost of three
because he was earning 9%,
how much more is nine than three?
Again, it's three times as much.
He began to understand, "Wow, it's costing me
because I don't understand how to optimize my assets."
Long story short, as we refinance properties
and resurrected deductions 'cause I'm a tax strategist,
we were able to get the bulk of that 600,000,
which was going to 750, out of his IRAs and 401ks
with no tax consequence because we offset the tax
by creating new deductions on his tax returns
by resurrecting deductions where he could deduct interest
by refinancing his rental properties
as it flowed over to his personal 1040,
I'm a tax strategist.
So he ended up with 750,000 at the end of five years,
750,000 at 8% payout is 60,000 a year.
At a 10% pay out, that 75,000 a year.
How much better is that?
Even if you split the difference on that situation,
at 8 1/2% he was able to be able to generate enough
to quadruple the amount of income,
where he was able to get about 60, 62,000
compared to 16,000.
He was able to get 60, 64,000,
even 75,000 a year of tax free income.
We have done this numerous times.
So this is how indexed universal life
structured correctly and funded properly
can outperform IRAs and 401ks invested in the market.
And you're able to sometimes double,
triple, even quadruple your income.
And at the end of the day, when he dies,
anything left in his laser funds blossoms
and transfers tax free.
If this is intriguing you,
there are 61 other stories like that contained
in this side of this book,
but this is actually two books in one.
I wanna gift you a copy free
and you can claim your free copy
of this 300 page book by simply going to laserfund.com,
L-A-S-E-R, fund.com or click on the link below.
You contribute a nominal amount towards the shipping
and handling, I'll cover the rest of that.
And I'll pay for the book.
This side, the white side is about 200 pages
with 14 chapters with all kinds of charts
and graphs and explanations if you're a left brain learner.
If you're more of a right brain learner,
you flip it over and read this one
and you can read about 62 different stories,
like what I just told you
where we've helped people optimize assets and minimize taxes
and many times doubled, tripled,
even quadruple people's net spendable income
by repositioning money out of those IRAs or 401ks
invested in the market, create more liquidity, safety
and earn predictable rates of return, totally tax free.
So claim your free copy.
And when you're in there
and there's options there to listen and learn,
watch and learn
check out some of the online educational webinars,
no charge.
You can even schedule a time to talk to an IUL specialist
to see how these strategies may apply
in your particular set of circumstances.
And you may wanna look at an RMD analysis report
to show yourself,
prove to yourself why considering a strategic rollout
could dramatically increase your net spendable income,
so you will not outlive your money,
versus leaving it in the market in IRA and 401ks.
(upbeat music)