THE NEW HOLISTIC RETIREMENT • 85 consider your ow n personal tax situat ion now and in t he future, and take steps to manage your current ex posure and potential legislative r isks. Marty’s New Strategy There a re various tools yo u c an use to diversify the tax status of your funds a nd ensure that some of your retirement assets can grow and be spent t ax- free. You’ve like ly heard of tools like Roth IRAs and Roth 401(k )s. Rot h account s operat e just lik e t heir non- Roth counterparts, with one big difference. In a traditional IRA, sa vers contribut e pre- tax dollars and are taxed whe n accessing the funds in retirement. In a Roth IRA, contributions are made with after- tax dollars and c an be accessed i n retirement tax-free. Roth accounts ar e popular for a r eason: They can b e a great way to protect savers fro m legislative risk and the likelihood that taxe s will rise in the fut ure. Marty and his w ife considered a Rot h conversion for t heir funds but ultimately chose a different tax- free strat egy. They were concerned abo ut the saver’ s dilemma Marty discussed in Chapt er Four. Since the investment options in Roth IRAs are us ually identi cal to the investment options in traditional IRAs, Marty felt a Roth only handled half his long game chall enges. Marty and his wife ultimately picked a tax- free strat egy us ing a type of lif e insur ance called Indexed Univers al Lif e (IUL). Growt h potential inside his IUL pol icy rel ies on t he concept of index ing w e previousl y discussed. Mart y and his wife kne w this solut ion not onl y a ddressed t heir lega cy planning needs by provid ing a tax- free deat h benefit , but it
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