This is step number four out of this series on five critical steps to take before retiring.
My name's Doug Andrew I've been a financial strategist and retirement planning specialist
for more than four and a half decades and years ago I developed a very powerful educational course
that took five and a half hours it was titled retire by design. Because at retirement planning
is so crucial and critical and way different than maybe what you did for retirement. See, a lot
of people accumulate money in traditional IRAs and 401ks in the market and as I explained in previous
episodes here the steps all too often people sort of paint themselves into a tax trap. They
paint themselves into a corner and I have to free them from that tax trap and so in the previous
episodes, I've given you glimpses of what we teach in this five and a half hour online course.
There's actually a 40 page workbook that comes with it if you stay with me to the end of this
episode I'm going to show you a way how you can actually get this five and a half hour retire by
design online course absolutely free including the workbook. Also, I want to gift you a copy of
this 300-page best-selling book the laser fund. How to diversify and create the foundation for a tax
free retirement. In these five critical steps we've talked about getting the clarity on
the why. The big picture in retirement so that you can enjoy your golden years and not worry
about your money and also not ruin your children and grandchildren on whatever you leave behind.
Understanding equal opportunity trust versus equal distribution. In the second critical steps
we talk about strategic tax planning and how to get money out of those tax-deferred IRAs of 401ks
with the lease tax impact. Make sure you watch that episode you'll understand how to save yourself
maybe a quarter of a million, a half million. We have saved some people over one million dollars
of unnecessary tax performing strategic rollouts, not rollovers. In the third step we talked about
where to reposition that after-tax money into a properly structured maximum funded indexed
universal life insurance contract so that it qualifies to be a laser fund. Now,
not all IUL policies would qualify to be laser funds. A laser fund is an indexed universal life
but I would say that over 99% of IUL policies would not qualify to be deemed a laser fund. You have to
structure it correctly and fund it properly. So, I'm going to show you how to do this and also explain
the indexing feature that I strongly recommend. Indexing has been around since 1997. So, the fourth
critical step is designing your laser fund using max funded indexed universal life and utilizing
indexing strategies properly. So, get ready, I'm going to show you some examples of this
and then hopefully you'll want to view the entire five and a half-hour online course
and stay with me I'll show you how you can obtain access to that absolutely free.
So, folks, in the third step I ended by using this metaphor of a bucket because years ago
when E.F Hutton who was credited for being the brainchild behind the emergence of universal life
to be structuring a life insurance contract for living benefits to accumulate your money tax-free
turn it into a tax-free cash cow. Where you're taking the least amount of insurance the IRS will
let you get away with and put in the most money the IRS allows as fast as they allow. I compare
that to a bucket. So you design one of these so that you can it can accommodate the amount of
money you want to be grandfathered to put in there. So the example that I give is like a bucket and
you want to design it to hold the amount of money you want to put in there whether it's 500 a month
or 10,000 a year or 100,000 a year or 500,000 a million and so you determine the amount that you
want to be grandfathered to put in there. You don't have to put that much in but it would behoove you
to do so. So, when you do this and you're designing it to be able to accommodate let's say 500
dollars or a million and then the tax citations Tefra, Defra, Tamra, that we talked about
in step number three that dictates the minimum death benefit required to accommodate this
amount of money so that it stays tax-free under the three sections of the internal revenue code
section 72(e) 7702 and 101(a). If you have not watched step number three be sure you do that. So, you have
to fill up the policy or the bucket in accordance with Tamra guidelines if you want to have tax-free
income the rest of your life. Generally speaking, that means if you want to put in 500,000 the
most you could put in would be around 100,000 if you're over age 50. You can put a little bit
more than that if you're under age 50. But you put in 100,000 the first day of the first year
another 100 the first day of the second year and then another 100 then another 100 and then
the first day of the fifth year that's four years and one day later you now have maximum funding in
this example. You don't have to do it that fast but that's the fastest you can fill it up in order
to have tax-free income ever after. So that is called the Tamra tax citation. This is all in
compliance with Tefra, Defra, and Tamra. Tefra and Defra as we explained in step number three
dictates the minimum amount of insurance that has to be attached to the account based upon your age,
your gender, and your health. Even if you're unhealthy if you qualify you can squeeze it down
because when you fund it correctly the actual cost of insurance gets cheaper as you get older. I've
had people who have had these for just 20 years and it cost 120th what it did when they were 20
years younger. Have you ever seen an insurance policy that gets cheaper as you get older?
It's because you haven't seen one designed to self-insure. If I put half a million in that
half a million will double in seven to ten years to a million. The original required death benefit
if I'm 60 years old is only 1,250,000. Now, a million of that is my own money. They're only
charging me for the net amount at risk the the remaining 250. You'll learn about this
when you go through the five and a half hour retire by design course or when you read my book.
When that million doubles to two million now you are self-insured. The insurance has to be
ahead of your cash value and now it's a tax-free cash cow under these three sections of the code.
72(e) allows you to accumulate that money tax free. 7702 says golly every million can generate
60, 70, 80, 100,000 dollars of tax-free income for as long as you live. That's 7702, how to access your money
tax-free and at the end of the day when you die section 101(a )says whatever's left in the bucket
will blossom or increase in value and transfer income tax-free. But you have to comply with
Tefra, Defra and Tamra tax citations or else you'll sort of bugger it up. It will move out
of the tax-free sections of the code over to the taxable section called investments. You don't want
that. Investments are also usually subject to market volatility and I don't want that.
So, here's how we recommend you design your laser fund. You want to link your returns
to an index or indices that the insurance company actually offers. So let me show you why. Here
is at the worst a 12-year period since the great depression. We call it the great recession and so
in November of the year 1999 let's say that you had accumulated a million dollars in your IRAs
of 401ks and they were invested in the market like so many Americans had their money in
the market just at the turn of the century. What happened? After 9/11 the terrorist attacks of 2001
people with money in the market saw that million dollar nest egg in this example dwindling value
from 2001 to 2003. The average person lost about 40 percent that million went down to 600,000.
It took four years to make back what they lost and they finally thought, "Okay, now I've had to
put off retirement seven years", they felt like they had lost their future and then they were ready to
retire and what happened in 2008. As Warren Buffett put it he said when the tide went out
in 2008 it revealed he was swimming naked. In 2008 most Americans lost 40 percent
again for the second time in a decade. It took four years to make back what they lost
and come back to where they had 1,046,000 to show for their million twelve
years earlier. Now, people who had laser funds and used indexing they may not have made anything
during the downturn but they didn't lose. Their money stayed up here and as soon as the market
turned around they started to make money right after they didn't lose any and they made money
and many of them doubled their money at this point when most Americans were barely back to break even
and then in 2008 many people with laser funds were going go... because they weren't losing a dime
and the first 90 days of 2009 they locked in gains of 16% tax-free after not losing a penny.
At the end of 2012, many of them had two and a half to three million dollars to show for the million
they started with when most Americans were barely back to break even. So, this is the beauty behind
having money exposed to risk in the market where it goes down and a 40% loss has to be followed
by a 67 percent gain to get back your money and then it happens for the second time in a decade.
What is better? See, indexed universal life insurance contracts did this. That allowed people
instead of getting this pathetic rate of return in the market which averaged less than one-third
of one percent during that 12-year period. People using indexing as I indicated. The green here
they may not have made anything but they didn't lose during these downturns. See, that? But as soon
as the market turned around they started making money again and they ended up with 130%
instead of 4.68%. What does that mean? Let's go back clear to 1975 the year after I started. I started
in 1974 as a retirement planning specialist. If you had your money in the market from 1975
until 2010 the end of that time that lost decade you would have had 5.6 million and it would
have been a roller coaster ride. You would have had a lot of heartburn during the ups and downs.
If you had money in indexed universal life this is what it would have looked like. You wouldn't have
lost money when the market went down. You wouldn't have had any heartburn but you would have ended up
with 8 million instead of 5.6 million. What would you rather have? In other words, instead of having
5.6 million with all the topsy-turvy ups and downs roller coaster and by the way that's tax deferred
in an IRA 401k, that's not your money. A third of it belongs to the government 1.7 million your net
is really only 3.8 million. Would you rather have this strategy or this one where you have
8 million without losing money during the downturns and 8 million is totally tax-free.
Sound too good to be true? No, you need to engage yourself in the retire by design course workshop
and read the book the laser fund. Indexing simplified is simply this. Let's take a snapshot
in time and let's say you have a million dollars of cash value inside of your bucket. Your
universal life insurance policy. These insurance companies are earning a rate of return based on
aaa double-a bonds mortgages on shopping malls and skyscrapers and back in the 1980s and 90s golly
interest rates were high. I never earned less than 11 and three-quarters percent from 1980 to 1990
on my laser funds. But now interest rates are low. These insurance companies in a low interest
environment are only earning maybe four or five percent average. They need one of those percentage
points for themselves but I can net let's say 4%. Anytime I want, I can tell the insurance
company hey just pay me the four percent this year. I think we're headed for a recession
and they'll pay me the 40,000 and at the end of the year I have 1,040,000.
But anytime I want to link to an index. I feel bullish about America. I can tell them, "Hey,
don't put my million at risk keep it safe in your company earning four but I'm willing to give up
the four percent. You can take the 40 000 that you're earning an interest and you don't have to
hold on to that for me. Just make sure my principal's safe", and you can take that 40,000 and
they fund an options budget and if I link it to the S&P 500 or The Dow Jones or the Russell 2000
these are called induses. You'll learn about them in the book. They take and they buy upside options.
So that they will have the wherewithal. So that if during that period of time, it's usually one year
point to point. If the S&P goes up 10% they'll pay 10%. If it goes up 12
they may cap it based upon the price of options or you may choose a no cap strategy with a threshold.
This is what has allowed many of our clients to lock in gains of 8%,12% up to
a cap or sometimes there is no cap. So, let me show you actual rates of return using indexing.
So before I show you an example of a typical statement. If this is intriguing you subscribe
to this channel. Click the bell so you'll be notified every time I post an in-depth answer
to a financial question which I do almost on a daily basis. But also I want you to watch
all five episodes all five critical steps that you should consider before retiring and this will
allow you an avenue to be able to get this five and a half-hour online course retire by design.
But stay with me till the end I want to gift you a copy of my most recent best-selling book called
the laser fund over 300 pages of information. So, folks, here is an example of an actual statement
you diversify into superior strategies. So, here's a client that had 20 of their money let's say they
have a million dollars in there and they have 200,000 in each of five different strategies.
2%0 of it could just be earning the 4% in the general account portfolio.
But here this is an actual statement and it says oh on this 20% of your money you earned 14.89%.
16 and a half percent on this portion of your money and a quarter percent on this fifth
of your money. 15.07 on this fifth and 13%. Do the average. Folks, this is where many of our
clients have averaged 11-12 even 15, 16, 20%. In fact, there are periods as of the recording of
this episode it's the year 2021 we've had many hundreds of clients that already this year have
locked in gains of 25 and 30% and even 61.33 percent because they linked in March of 2020
during the temporary crash due to Covid19 pandemic. One year later they were uh credited 61.33 percent.
We had clients that had 850,000 in March of 2020 and one year later they had a million
three hundred and eighty thousand dollars. They made well over half a million in one single
year tax-free. That's using indexing. So, that's why I call indexed universal life a financial swiss
army knife. It is actually the dream solution not just for retirement planning but for all kinds of
goals. Yes, it's good for death benefit. It's really good for retirement planning knocks the socks
off of traditional IRAs and 401ks but college savings? This will outperform a 529 plan by far and
it has way more flexibility and transferability tax-free. You can use it as a working capital
account for business, for real estate management. You can use it for emergency funds because it's
actually safer than keeping your money in some bank and it passes the liquidity test better
than even banks and credit unions do. You can use it for lump sum capital transfers, estate planning,
pension maximization if you're a school teacher, a police officer, a firefighter,
a tax reduction. Folks, this is the dream solution. So, here's how you can claim your free copy of this
book called the laser fund and empower yourself and be able to gain access to the five and a half
hour online course retire by design absolutely free and get the 40-page workbook. but simply go to
laserfund.com... click on the link below contribute a nominal amount towards the shipping
and handling. I'll cover the rest of that. I'll fire out a copy of this 300-page book to you. It's
actually two books in one this side is 200 pages 14 chapters with all kinds of charts and graphs
explanations. If you're more of a right-brain learner you flip the book over to the orange side
and this is about 100 pages 12 chapters with 62 actual client stories of how this is a swiss army
knife for many financial goals. So, claim your free copy of the book now and when you do that
you'll enter our database and be notified when we teach these educational webinars absolutely
free and by attending one of them you'll then be given the opportunity to be able to get the online
retired by design five and a half hour course at no charge. So, here is to your brighter future.