- I've never owned an IRA or 401k, never will.
I've never owned a Roth IRA or 401K
and never will.
In this educational episode, I'm going to reveal
one of the unfortunate disadvantages of a Roth,
it affects your Medicare
whereas money out of my favorite vehicle,
a Max Funded Insurance Contract,
IUL, Index Universal Life does not affect your Medicare.
Plus IUL policies have six benefits,
Roth only have two.
Get ready, you're gonna get educated.
(bright music)
So I'm Doug Andrew.
I've been a financial strategist
and retirement planning specialist now
for nearly five decades.
I started in 1974
and my favorite financial vehicle bar none
is a property structured, maximum funded,
indexed universal life insurance contract.
Now sometimes people say what?
I've never seen an insurance policy
ever performed very well.
Well, you probably haven't seen one structure correctly
and funded properly because if it is,
it is what I call a Laser Fund.
Now laser fund, that actually is the title
of my most recent bestselling book, 'The Laser Fund'.
And Laser is an acronym that I've used for years
that stands for liquid assets safely earning returns.
Now, a laser fund actually can accumulate your money
totally tax-free and then can generate tax free income
that will dwarf what most people can realize
out of their IRAs of 401ks or even their Roth's
especially if that money is invested in the market.
So I'll explain here in just a moment.
But see, a laser fund has to be structured correctly
and funded properly.
It is actually where I have averaged since 1980
when universal life was first introduced by E. F. Hutton.
I've averaged 9.62%, but since 1997
when indexed universal life was introduced,
I've averaged over 11% and netted over 10% cash on cash.
If you understand rule of 72 math, if you're earning 10%,
your money will double every 7.2 years, meaning that,
golly, I've had people
that started out with a half a million and even at 9.6%,
okay, 9.6% divided into the rule of 72,
your money will double every seven and a half years.
And so a half a million doubled to a million tax-free
in seven and a half years,
a million double to 2 million
in another seven and a half years by the 15th year.
That 2 million double to 4 million
in another seven and a half years
in the 22nd and a half year,
and the last seven and a half years, by the 30th year,
that 4 million double to 8 million.
Yep.
I've had clients that now have $8 million generating
$600,000 to $800,000 a year of tax-free growth.
They could take out $800,000 a year of tax-free income
for the rest of their life if they live to be 120
based on historical performance
without outliving their money.
And so you compare that to money invested in the market
in traditional IRAs of 401ks
and you will not find an advisor, an asset manager
that will illustrate a 10% net after tax payout
with your money in the market.
They're actually forbidden from showing it
because DALBAR who studies investor behavior says that
if you bought and held in any 20 year period,
you will likely earn an average of only 9.14%.
So if an advisor is telling you,
'Hang in there. You'll likely average 12%.'
I would not buy that.
Even if they could earn you 12%,
you're not netting 12 after tax.
In a 33% tax bracket, you're netting eight.
If you had a million dollar nest egg, you're earning 12%
and you pulled out that 12% a year, 120 grand,
you're gonna pay tax of 40,000.
You're only netting 80,000 or 8%.
If that advisor is charging you 1% in asset management fees
on that million,
you're having to shell out another 10 grand.
You're only netting seven, 70,000.
See, I would rather be able to net 10% tax free
and I can do that
with a max funded indexed insurance contract
based on actual historical performance.
And so, DALBAR also says the average retiree
with money in the market is not really earning 9%
because they're buying and selling at the wrong time.
They get emotionally involved.
They see that retirement nest egg when the market goes down
and when it drops down 20-30%, they go enough already
and they sell low.
And they wait, wait, wait until the market comes back
and rebounds and then they buy high.
So DALBAR says the average retiree with money in the market
is only averaging 3.49%.
That's why the financial services industry came out
with what is called the 4% rule.
They only want you to pull out 4%.
On a million dollar nest egg, that's only 40,000 bucks.
That's pretty pathetic in my opinion
and it's taxable.
In a 25% bracket, you're paying
10,000 of that 40,000 in tax, only netting 3% or 30,000.
You subtract another 1% in fees, only netting 2%.
That's ridiculous.
You could be netting eight, nine, 10%
out of a max funded indexed insurance contract.
So is this making some sense?
But let's get back to a a big premise
or statement I made at the very beginning.
I don't want to mess around
with my money in a volatile market in IRS or 401ks
and I don't even want to convert to a Roth
because Roth have too many strings attached.
That's why I've never owned one and never will.
There are six benefits
to a Max Funded Indexed Universal Life insurance policy
compared to the two benefits with the Roth.
But there's one additional benefit
that a lot of people don't even understand and that's that
Roth distributions withdrawals affect your Medicare.
Money out of an IUL does not affect your Medicare
and that is something you ought to consider.
So let me quickly summarize the two benefits Roth have.
See you fund a Roth with after tax dollars
and your money accumulates tax-free, benefit number one
and then you can access money and take out tax free income,
that's benefit number two.
That's it. That's a Roth.
Now, why do I use max funded IUL?
Because IUL has had those two benefits for over 108 years,
but they have four additional benefits
that Roth will never have.
Basically,
with a max-funded indexed universal life insurance policy
I can design them to accommodate
30,000 a year of contributions or $300,000 a year.
You can't do that with a Roth.
In fact, if you make too much money,
you can't even own a Roth.
That's why many savvy CPAs and tax attorneys refer to
a Max Funded Indexed Universal Life insurance policy,
a laser fund as the rich person's Roth.
I snicker 'cause you don't have to be rich to have one
but rich people can't own a Roth, okay?
But if you design an IUL policy
to accommodate $300,000 of annual contributions,
that's okay if you're a business owner.
Do you have to put in 300,000?
No, you could put in just 30,000.
You could make up the other $270,000
the room you didn't use any time in the future.
If you don't use the little bit of room in a Roth
in a given tax, you lose it forever.
Also, if you need to tap into money
in a Roth,
you cannot touch money in a Roth for five years
or until age 59 and a half without incurring a 10% penalty.
If I put in $300,000 into a laser fund
and 30 days later I have an opportunity
to invest some money or I have an emergency,
I could access a couple of hundred thousand of that
to 300,000 I put in there.
I could access that.
There's no 10% penalty by the IRS.
I can access money because it's liquid in my laser fund.
You can't do that with a Roth.
What's the next benefit?
Well, Roth's don't allow you to use indexing.
Your money is usually in the market.
You will lose maybe 20%, 30% ,40%
and have to wait around till the market comes back.
With laser funds, your money is linked to the market
but your money is not invested in the market.
When the market goes up, you get to benefit.
You get to earn rates of return sometimes
of 12%, 16%, 25%,
61%, 158%.
Many of our clients have locked in gains during up years.
But if the market crashes 20%, 30% ,40%,
you will not lose one dime
because your money is not invested in the market.
It's linked to an index like the S&P
and your insurance company
takes the interest on your money
and buys upside options to be able to pay you
if the market goes up.
But if the market goes down, those options expire worthless
but you do not lose the principle you started with.
See, one time Will Rogers said
people get more concerned about the return
of their money when things get bad
rather than the return on their money.
That's why I love Max Funded Indexed Universal Life.
So, the last benefit with laser funds is
at the end of the day, when you die,
anything left in a laser fund,
a Max Funded Indexed Insurance Policy blossoms,
increases in value when you die.
I'll just summarize it by saying this, I'm 70.
If I die tomorrow in an accident,
every million dollars I might have in my laser funds
would blossom to double that about 2 million tax-free
and transfer to my heirs.
There's not a Roth around that will do that.
And people say, 'Well, how much does that cost?'
Well, nothing's free, but it doesn't cost me anything.
It's coming along for the ride being paid for
with a minuscule portion of money
that would otherwise go out the window in unnecessary tax
or with money on fees with Roth's
or that you're giving giving up in right of return.
But getting back to
the benefit most people don't think about,
if you take money out of a Roth
it's actually going to show up on your tax return
and it will affect your Medicare.
Even though it's tax free, it will affect your Medicare
and you may have to pay more in premiums,
the benefits will be adjusted.
You will suffer because it affects your Medicare.
If you have income tax-free coming out of a laser fund,
max funded IUL, it's not going to affect your Medicare.
The IRS will know you're receiving it.
They know everything, but it doesn't affect your Medicare.
That is a huge benefit.
It's actually probably the seventh benefit
that I failed to mention many, many times.
So why would you mess around with a Roth
when it only has two benefits
when you can have those two benefits
and in this episode, five additional benefits
with a laser fund?
When people begin to understand that, they go,
'Yeah! This is the no-brainer.'
So if you wanna learn more about this
and what a properly-structured
Max Funded Indexed Universal Life Insurance Policy is
and how to structure it correctly
and what advisors actually understand
how to do this properly, claim your free copy of this book.
It retails on Amazon for 20 bucks.
This isn't about me and selling you a book.
This is about you.
I want to gift you a copy, okay?
So to claim your free copy of this 300 page book,
simply go to laser fund, L-A-S-E-R fund.com
or click on the link below.
You contribute a nominal amount
towards the shipping and handling.
I require some skin in the game,
but I'll cover the rest of that cost
and I will pay for the book.
I'll fire out a hard copy to you via priority mail.
When you're in there claiming your free copy,
if you like to listen and learn or watch and learn,
there's audio and video options.
But check out the educational webinars
we teach on a regular basis.
They're free.
You can even schedule an appointment
with an IUL specialist at no cost or obligation
to see how these strategies may apply
in your particular set of circumstances.
And you can then watch and learn, listen and learn.
But this is about your brighter future
because this book is actually two books in one.
This one is for the left brain thinker,
this one's for the right brain.
This has all the stories,
this has all the charts and graphs.
So this book is for everybody.
And I wanna see you on the other side
of your brighter future where you could protect yourself
and not outlive your money.
(bright music)