Planning for Retirement?
Don’t Let the IRS Be Your Biggest Beneficiary
Planning for Retirement? Don’t Let the IRS Be Your Biggest Beneficiary
Imagine this: You’re 45 years old, just starting to seriously plan for your retirement. You’ve decided to put away $10,000 per year into your 401k, or a similar qualified retirement plan. You’re smart with your money, and you’re counting on the average return of the S&P 500 over the last 20 years—a solid 9.8% CAGR. Fast forward 20 years, and you’re ready to retire. You’ve done the math, and your account is sitting pretty at $614,773. Not bad, right?
But hold on—there’s a catch. You’re not the only one with a claim on that money. Meet your business partner: the IRS.
Let’s say the tax rate when you retire is 30%, which seems reasonable. Suddenly, you owe a whopping $184,432 to Uncle Sam. That comfortable retirement nest egg you built? It just got a lot smaller.
Now, let’s imagine the tax rate goes up to 40%. After all, it was that high before the Trump tax cuts. In this scenario, you owe the IRS $245,900! And if taxes were to rise even higher—say, back to the over-50% rates seen in the not-so-distant past—you could be handing over more than half of your retirement savings.
But it doesn’t have to be this way.
The good news is that you have options—two, in particular, that can help you avoid this tax nightmare. The first is the Roth IRA, including the Roth Rollover. With a Roth, you pay taxes on your contributions up front, but all your withdrawals in retirement are tax-free. It’s like a gift to your future self—a gift that keeps the IRS out of your pocket.
The second tool is an Indexed Universal Life (IUL) insurance policy. This is not just life insurance; it’s a powerful financial vehicle that offers the potential for tax-free income in retirement. With an IUL, your money grows tax-deferred, and you can access your cash value through tax-free loans. It’s a strategy well over 90% of my clients have used to set themselves up for a tax-free, extremely comfortable retirement.
Rather than let the IRS be your biggest beneficiary, take control of your future. With a little informed planning, you can keep more of your hard-earned money and live the retirement you’ve always dreamed of—free from the burden of excessive taxes.
Want to learn more? My best-selling book, The IUL Book, is available on Amazon for less than $5. It’s packed with all the details you need to make these strategies work for you.
Don’t wait until it’s too late—start planning for a tax-free retirement today!