WHY YOU SHOULD CONSIDER A STRATEGIC ROLLOUT
What if you could save a significant amount on taxes, while setting yourself up for tax- free income during retirement and an income-tax-free transfer of your money to your heirs when you ultimately pass away? WEIGHING THEIR OPTIONS That’s a pivotal moment a couple we’ll call the Garners were facing when they met with us. They had just turned 60 and were exploring their options, wondering if their current retirement strategies could be better. At that point, their pensions and investments, including their 401(k)s, 403(b)s, and TSAs, totaled $250,000, and they had recently rolled all their supplemental accounts into IRAs. They were considering whether to begin withdrawing money from their IRAs during their 60s or waiting until later. On the advice of an accountant, they were leaning toward waiting until their 70s, which meant delaying the taxes they would inevitably be required to pay. After meeting with us to look more closely at their strategy, we were able to help them see the risk of handing too much of their retirement savings over to Uncle Sam if they waited until their 70s. After age 59½, you can start to withdraw money from your traditional accounts like IRAs and 401(k)s without a penalty. Taking money out of your account is completely optional … until you reach the age for required minimum distributions (RMDs), which is currently age 73. At that point, the government outlines a minimum amount you have to withdraw each year (so Uncle
Because more of your retirement money should go to you, not Uncle Sam
Sam can start taking his share in taxes).
THE COST OF WAITING If the Garners had waited until they HAD to take money out with RMDs, they could have ended up owing Uncle Sam as much as $250,000 in taxes … an amount equal to what they had in their IRAs at the time! They realized they could NOT afford to pay that much in taxes. They also wanted to look forward to a good quality of life throughout their golden years. After more research, the Garners decided they would rather get their taxes over and done with and reposition their money in a financial vehicle that would provide greater liquidity, safety, predictable rates of return, and tax advantages. They opted to do a strategic rollout. Over the next five years, they moved their money out of their IRAs, got their taxes over with, and transferred that money into an IUL LASER Fund. They ended up paying $60,000 in taxes. That might sound like a good chunk of change, but it pales in comparison to the nearly $250,000 they would have paid in taxes if they’d waited to take RMDs from their IRAs in their 70s. That’s a savings of about $190,000 that remained in their pockets, versus going to Uncle Sam’s. Now they have the peace of mind knowing their money is growing tax-free in their IUL LASER Fund, safe from market volatility, ready to provide tax- free income during retirement.
YOUR MONEY, OR UNCLE SAM’S? One of the biggest takeaways? It’s important to remember that your money will never be worth more than it is today. Think about it. The cost of living is higher than when you were a child, right? It’s even higher than it was a few years ago! Inflation has a way of perpetually raising the bar for what we’ll need to cover our expenses during retirement. And remember, with what we call the Deduction Reduction, your current tax bracket is likely the lowest bracket you’ll be in going forward. That means NOW may be the best time for a strategic rollout, repositioning your money from traditional accounts like IRAs and 401(k)s into an IUL LASER Fund. When done correctly, a strategic rollout can enable you to stay within your same tax bracket and even offset some (or all) of the tax incurred during the rollout. The bottom line is with traditional accounts like IRAs and 401(k)s, you’re going to pay taxes. The question is this: Do you pay them now (strategically and at a lower tax rate) as you move your money into an IUL LASER Fund? Or do you do what the Garners ALMOST did and end up paying more taxes later because you waited? If you’d rather do what the Garners did, a strategic rollout is the answer. Strategic rollouts require specific steps to comply with tax laws, as does opening an IUL LASER Fund. We spell out more of these details in our book, “The LASER Fund.” We invite you to learn more so you can decide if a strategic rollout is right for you, right now.
Explore your options for saving on taxes with a Strategic Rollout. Order your free copy of “The Laser Fund” book today.
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