THE NO-COMPROMISE RETIREMENT PLAN • 93
How Should My Advisor and I Evaluate My Current IRA/401(k)?
This book has outlined a sound alternative to qualified ac- counts. But it’s impossible for a book to determine if that is the right approach for your individual needs. Here are the areas you and your financial advisor should evaluate: • Total tax liability : How much in taxes will your 401(k) or IRA generate over your lifetime? Based on this analysis, you can decide if moving funds from a tax-deferred status to a tax-free status makes sense. • After-tax growth potential : Using reasonable assumptions for growth and taxation, what would your after-tax IRA value be in ten, twenty, and thirty years? • Less favorable market growth : What would happen to your IRA value if market performance is less favorable than as- sumed above? How Can I Compare Results to an IUL Policy? You should compare after-tax growth in your IRA / 401(k) to after-tax growth in an IUL policy. Why after-tax growth and not just growth? After-tax growth is the money you actually get to keep. You should evaluate which strategy can provide more growth and income in terms of money you’ll be able to spend. Okay, now I’m going to get wonky. Feel free to stop here if you have enough information to make an informed decision. If you’d like to get into the weeds of how your funds will be converted from your IRA to an IUL policy, read on. There are many nuances in a strategy like this. That’s why it’s critical to work with a financial advisor who understands both the IRA and IUL sides of this strategy.
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