I don't own an IRA or 401k, never have never will. In this episode, I'm going to address the question
what's better than an IRA or 401k to save for retirement? Get ready, it's probably not what you
think I'm going to blow you away with something that I feel is far superior to an IRA or 401k
and you'll understand why I've never owned one and I never will own an IRA or 401k.
So, my name's Doug Andrew and I've been a financial strategist and a retirement planning specialist
for more than 48 years. In that nearly five decade era I've helped thousands of people
prepare for a comfortable retirement so they will not outlive their money and all too often
people come to me with yet to be taxed IRAs and 401ks invested in the market at retirement.
Now, one of the principles I teach on this very channel three-dimensional wealth is at retirement planning
is something totally different than maybe what you did for your retirement planning. In other words,
money invested in the market wall street was not built to create predictable income or to sell
your mutual fund shares or your stocks. If you ask wall street, when is the best time to sell my
stocks? They will say, never. If you ask an advisor that has your money invested in the market to
create a predictable income stream for you so you will not outlive your money they cannot do it or
if they do it's at a pathetic four percent payout. It's called the four percent rule in the financial
services industry. Because the average retiree in America only earns 3.49 percent on their IRAs and
401ks invested in the market during retirement. If you take out more than four percent you'll likely
outlive your money. So, they don't want to be sued for you out living your money and so they tell
you to only take out four percent which is pretty pathetic. On a million dollar nest egg that would
only be 40,000 a year of income. Now, I don't know if you're like me but I don't save a million bucks
to have a measly forty thousand a year of income and I have to pay tax on it to boot. Even in a
25% bracket that's 10,000 of the 40,000 I only net 30,000.
Many of these asset managers would charge you 1% on that million dollars that's another
10 grand. You're really only netting at 2% or 20,000 after taxes and the fees. That's pretty pathetic.
My favorite vehicle that I have used and empowered many people to use knocks the socks
off of an IRA 401k and it usually generates at least an 8% payout and even 10%
and higher tax-free. How much more is 8% than 4%? Don't say four is double. On a
million dollar nest egg we're talking about 80,000 a year of tax-free income for as long as you live
versus 40,000 a year of income that you have to pay tax on and you have to pay fees on. When I
am comparing it to 8%, 8% is net. 4% is not the net for most people
unfortunately in retirement. So, how did this all come about and why have I never owned an IRA 401k
and never will? Let me share with you sort of the history behind it and why the original
premise has been wrong ever since they came up with the idea. Years ago, I wrote several editorial
articles for several newspapers and magazines and one that got millions of views and readers was an
article titled how congress is peddling IRA and 401k snake oil and I was talking in that article
about how congress tries to dupe most Americans to contribute pre-tax dollars or tax-deductible
contributions into IRAs and 401ks. Accumulate the money tax-deferred and then agree to pay tax
when you withdraw the money during retirement. What was the original premise for that, oh, you'll likely
be in a lower tax bracket when you retire. Well, folks, most Americans are not in lower tax brackets
when they retire. So that has not been true or axiomatic for more than 30 years now and yet
the financial services industry still touts that you want to put money into a traditional IRA 401k
and you'll likely be in a lower bracket. Now, the financial services industry actually has been
forced to admit that most people who accumulate any type of a respectable retirement nest egg
are not in lower brackets when they retire. They're in as higher brackets as they've ever
been in even if they have less income because most people are going down the highway of life
trying to save in these tax deferred accounts with one foot on the gas pedal and the other
foot on the brake pedal and they didn't know they were doing it and the foot on the gas pedal
would be money in tax-deferred IRAs of 401ks thinking you're going to be in a lower bracket.
But you're assuring you're not going to be with the other foot on the brake pedal. Most Americans
pay off their house, they lose that deduction, the kids are gone, so you don't have that deduction
anymore. Even if the kids move back in with you as adults you can't claim them as dependents
anymore. You're not contributing money to IRAs of 401ks or 403b's or 457s in retirement. So you
don't have that deduction. If you are a business owner you don't have those deductions anymore
and frankly, congress keeps raising taxes. So, most Americans hit retirement and they're in as higher
higher tax bracket as ever and they don't have any deductions. Do you know that even school teachers
usually, pay back every dime they saved in taxes over 30 years on their contributions? During the
first two and a half years of retirement they pay back a hundred percent of the taxes they saved
over 30 years on the contributions the first two and a half years of distributions and they do it
again and again and again to where by the time they die they have usually paid back 12 to 15
times the taxes during retirement. The taxes they saved during their working years. Whose retirement
were they planning? Theirs are Uncle Sam's? 91% of Americans are duped into doing that. Only 9% will
choose a Roth because they realize I'm not going to be in a lower bracket when I retire. It would be
better to just bite the bullet and pay the tax at today's lower rates and have my money accumulate
tax-free and then generate tax-free income on the back end. Now, I'm gonna confess something here,
I've never owned a Roth IRA 401k either. Never have and I never will. My favorite vehicle knocks the socks
off of a Roth IRA 401k, they only have two benefits. They've only been around since 1997. My favorite
vehicle called the laser fund has been around for a hundred and seven years. It's a sacred tax-free
cash cow in the internal revenue code. It has six benefits the Roths only have two of those six.
So, why would I ever want to put money in a Roth when I can have all the benefits of a wrath and
for additional benefits. Does that make sense? I'll share with you how you can learn more about this
laser fund here at the end of this episode. But let me share with you a couple of other articles
that have been published through the years about IRAs and 401ks. Now, if this is resonating
with you and you're thinking oh my gosh and you can think of somebody who ought to see this.
Be sure and share this episode or post a comment click like but I would recommend you subscribe
to this three-dimensional wealth channel and when you do click on the little bell.
Then you'll be notified every time I post a new financial question or episode 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 a 300
page bestselling book called the laser fund how to diversify and create the foundation for a tax
free retirement and you'll see why it knocks the socks off of any IRA or 401k that I've ever seen.
So, back in 2009 the year after most Americans lost 40 percent for the second time in a decade
with the value of their IRAs or 401ks invested in the market. That was 2008 the mortgage meltdown.
The first time they lost 40% was after the 911 terrorist attacks. If they had a million-dollar
nest egg saved in the year 2001. They saw it in three years go down to 600,000.
It took four years to come back to break even at a million. Many of our clients doubled their money
during that seven-year period using the laser fund. They did not lose when the market went down
and they made money when it was going up. In 2008 none of our clients lost one dime due to that
crash. Most people lost 40% again for the second time in a decade. It took four years until 2012
to come back to break even. Most of our clients had at least tripled their money. A million was
worth 3 million at the end of 2012 when most Americans their IRAs and 401ks were barely
about to break even. Time magazine had a cover page story that said, why it's time to retire the 401k
and do something better instead? Now, the author of that article was Stephen Gandel and he said
the 401k is a lousy idea, a financial flop, a rotten repository for our retirement reserves. Now, I had
never used that strong of language but he was talking about how people had their retirement
into this vehicle that was subject to this market volatility. I actually said well yeah that's the
third reason I've never owned an IRA 401k in the market. The first two reasons are taxes, taxes
are going to be higher in the future. Why do you want to postpone, defer, procrastinate, pay tax to
some future perceived unknown advantage and then withdraw your money down the road when most of
us are convinced taxes will be higher. That doesn't make sense. The other is inflation, inflation erodes
away a lot of people's purchasing power and most people inflation is the hidden tax that causes
them to outlive their money. So, my favorite vehicle which I call the laser fund eliminates the dangers
of taxes inflation and market volatility. You can learn how and why because I'm immune from those
three. I convert to tax-free. I link my returns to the things that inflate and when the market
goes down I don't lose. When the market goes up I benefit but my money is not at risk in the market.
I simply link my returns to when the economy is doing well. That's a strategy called indexing. So,
let me share with you one other article that came out I think it was January 1st or
January 2nd of the year 2017. In the beginning, of 2017 the wall street journal had an article
that said the original champions of the 401k lament the day they ever came up with that idea.
Why? Well, it's because the 401k was meant to be a supplemental plan and it ended up becoming the
primary plan for most people in America because a lot of employers and corporations they wanted to
be off the hook. They didn't want to offer defined benefit pensions where they had to manage money
and guarantee somebody a certain amount of income like a school teacher or police officer
based on the years of service. 30 years of teaching school times two percent you get 60% of
your last best salary for the rest of your life in a defined benefit pension. They wanted
to shift to defined contribution that's a 401k where the employer is off the hook and
you define the contribution how much you want to contribute the employer might match. But you
get to decide how your money is invested and if you make money or lose money that's your problem
and that's a 401k. The original champions of the 401k did not intend for the 401k to become the
primary retirement savings vehicle in America and especially because most people are not savvy they
buy and sell at the wrong times. They wait... when the market goes down... and they
sell low and then they wait... and they buy high and that's why darbar says the
average person who has money invested in the market in IRAs and 401ks is only earning 3.49%
and that's where we come up with the 4% rule from the financial services
industry. How sad is that? So, what is better? I'm going to show you how you can learn what's better.
I'm gonna give you a copy of my 300-page book the laser fund. In here you'll learn
that the laser fund has six benefits. See, Roths are funded with after tax dollars like a laser
fund is. But see, your money accumulates tax-free and you can access it tax-free in the laser fund
and a Roth but that's the two benefits of a Roth. The laser fund has four additional benefits. You'll
learn that with the laser fund you can contribute larger amounts. If you're a business owner you
could put in 300,000 if you want you don't have to. You could put in 30,000 but you can catch up
the other 270,000 anytime in the future. You can't do that with a Roth. You can only put in a certain
dollar amount or a certain percent of your income. If you don't use the room in one year you lose it.
With the laser fund, you can make up for it. With the laser fund if you need money at any time
before age 59 and a half, it doesn't matter you can access it. There's no IRS penalties if you touch
the money in a Roth in the first five years before age 59 and a half there's a 10% penalty.
I don't want those strings attached. If you use a laser fund you get to use indexing which means
you're able to participate when the market goes up but not lose when it goes down. Because your money
is not invested or at risk in the market and the laser fund at the end of the day when you die it
increases in value it blossoms in value. If I died I'm 69 in an accident tomorrow every million would
blossom to about two and a half million and transfer tax-free to my heirs, my spouse, my
kids, my grandkids, my church, my charity, whoever I want. There's not a Roth around that will do that.
People say, how much does that cost? Well, nothing's free but it doesn't cost me anything. It's coming
along for the ride. Are you intrigued? Here's how you can learn. If you go to laserfund.com
or click on the link below you contribute a nominal amount towards the
shipping and handling. I'll cover the rest of that cost. I'll fire out a copy of this to you it's
actually two books in one. This white side is 200 pages 14 chapters with all the charts and graphs.
If you're more of a right-brain learner you flip it over to this side this is a hundred
pages 12 chapters with 62 chicken soup for the financial soul stories of how the laser fund
is the dream solution for a lot of financial goals not just retirement. It could be college funding.
It could be working capital for your business real estate management emergency funds on and on and on.
You'll see why it's my dream solution. So, go to laserfund.com empower yourself there's
also options there to listen and learn watch and learn but here is to your brighter future.