his tax bracket never changes, he would have only paid $200,725, plus approximately $88,000 on his original $340,351 after 31 years of growth. His total taxes paid to the U.S. Treasury (IRS) would be approximately $288,876. Compare this to the $850,564 less employer match of $69,341, which totals $781,223 in taxes due upon withdrawals from his employer’s 401k. Are you better off paying $288,876 over 31 years or the taxes on your entire harvest of $781,223? As you will begin to see, it is better to pay taxes on the seed instead of the harvest. A) And he would eliminate the $803,468 in management fees. B) He would have great liquidity from day one and a $1,100,673 death benefit that could be used as a long-term care benefit if he meets the daily standards, which is, can’t perform 2 of the ADLs daily. C) He would have over $1,100,673 in death benefits from day one. D) After 31 years of saving, his cash value based on current dividends would be approximately $1,889,464 in his cash value account, and his death benefit would be $3,303,433. At age 70, he would be able to withdraw as much as $95,000 tax-free income for the next twenty years and, at the end, still have $1,148,452 in his cash value and a death benefit of $1,660,483. I believe what tells the whole story is employee. It tells the truth. By understanding how qualified plans truly work, you can see how much further ahead a person can be by keeping his/her retirement plan private and under their personal control instead of the government’s and Wall Street’s plan of action.
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