THE NEW RULES OF RETIREMENT SAVING • 85
her entire death benefit would be passed to her children without any taxes due. Remember when we talked about a self-completing plan? It’s good to know that should something happen and you not make it to retirement, your heirs will get their full benefit — and not lose a penny of it to the IRS. Macro vs. Micro Here’s the bottom line: You have to choose how you approach taxes in retirement. There are two lenses we can use to evaluate your taxes in re- tirement: Micro A micro view on taxes aims to reduce your tax burden in a given year. This lens is what has led many savers to a tax-deferred approach. Traditional IRAs and 401(k)s lower your taxable in- come in a given year. And if you're most concerned with taxes in one year, this is the lens for you. Macro A macro view on taxes aims to reduce your taxes over your en- tire lifetime in retirement. And if that's your goal, diversification with tax-free saving, like a Roth or IUL, becomes the right choice. So ask yourself: Are you most concerned with reducing taxes this year, or over your lifetime in retirement? I know what my an- swer is, and I bet I can guess yours, too. If reducing lifetime taxes in your goal, you need a macro ap- proach to taxes in retirement. And IUL can help you achieve it.
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