How Would You Like the Security of a Tax-Free Paycheck in Retirement?

At Advanced Wealth Preservation we help you do it.

One of the biggest negative wealth transfers we see in retirement is taxes. The more wealth you have…the bigger the tax hole can be at the bottom of your wealth bucket.

Virtually all defined benefit and contributions plans are set up with delayed tax benefits. You get the tax benefits today and Uncle Sam gets the tax benefits when you take your money out in retirement.

Listed below are the most popular tax-deferred retirement savings accounts today:

• Traditional IRA’s
• 401(k)’s
• 403(b)’s
• 457 Plans
• Keogh
• SEP
• Deferred Compensation Plans
• Defined Benefit Plans

While there are many positives to saving money in these tax-deferred accounts, there are two huge unknowns that affect these accounts in retirement. The first is market performance. (You can read more about market performance in the IRA/401(k) section of this website). The second great unknown are taxes. Here’s why.

Every qualified retirement account has two account holders, you and Uncle Sam. But here’s the catch. You are not in control of your account, Uncle Sam is. He decided all the rules before you put your money in…and you agreed to them. These rules include:

• A 10% penalty if you take money out before age 59 ½
• Restrictions on how much money you could put in each year
• Required minimum distribution at age 70 ½
• Income taxes on distributions

Here’s the major difference regarding the last rule. The first 3 rules have known terms. The last rule is unknown and could change many times in your retirement.

Here’s why:

Let’s say you had $1,000,000 in one of your IRA accounts in 2012 and you were in the 36% tax bracket. That meant you had $640,000 in your account and Uncle Sam had $360,000 in his account. But in 2013 the tax rate jumped up to 39.6%. That meant your portion of your IRA just went down by $39,000 with a stroke of the tax pen. And your ownership percent will continue to go down every time income taxes are raised in retirement.

At Advanced Wealth Preservation, we provide a hedge against income taxes by looking at alternative tax-free income plans. These plans provide the same tax-deferred benefits of traditional retirement accounts only they have:

1. Expanded contribution opportunities
2. No minimum required distributions
3. Protection against market losses using insurance products
4. Penalty free partial withdrawals or loans
5. Tax free access to your money
6. Protection against loss of life

Contact us today if you want to take control of some of your taxable income in retirement. Access to tax-free income is a nice bucket to have in any wealth preservation plan.