8 Scary Truths About Your Qualified Plan (IRA)
And, How To Avoid Being Taxed to Death!
If you are pondering the thought of contributing more than your match to your 401k or whether or not to make an end of year contribution to your IRA,
THINK AGAIN!
Before you put another dime into your 401k, 403b, TSP, SEP or other IRA you need to know what the government and your employer aren’t telling you. And,
the truth may scare you! Here are the scary facts about qualified plans that you’ll want to know.
SCARY TRUTH #1: While many people think their Qualified Plans, that’s your 401k, 403b, TSP, SEP or IRA, save taxes; they don’t.
They do 2 things:
1. They defer tax
2. They defer the tax calculation
SCARY TRUTH #2:
Your employer may be making decisions about how your 401k is managed, without your knowledge. More and more employers are now automatically directing more of their employee’s pay into their 401k, and often it is into more risky investments; even though you may have previously chosen your own investments. Much of the money is being re-directed into “target-date” mutual funds, These funds lost so much money last year, that lawmakers and regulators are now analyzing and scrutinizing their actions.
Morningstar reported that many that were at or near retirement with these type funds, suffered losses of 32 to 41 percent.
Even scarier, the fees charged on target-date funds are “significantly higher than those charged by other funds on plans’ investment menus” according to
MoneyCentral.msn.com on October 10, 2009.
In comparison, the growth in a properly funded permanent life contract is both guaranteed and exponential. You can also predict the minimum guaranteed value of the plan, the minimum guaranteed income you can take from the policy, and how long you could take the withdrawal.
SCARY TRUTH #3:Many of the important decisions about your employer sponsored IRA (401k, 403b, TSP, etc) may be made by people who may have No Training or education.
According to the November, 2009 issue of
SmartMoney Magazine (“The Accidental 401k Planner”), as many as 90% of the country’s employees’ 401k plans are watched over by people who “need no special qualifications and no investing expertise or experience”. Many managers hire brokers to suggest mutual funds, and brokers are not legally required to choose funds with low fees, so the outcome could cost you tens of thousands of dollars over your lifetime.
SCARY TRUTH #4:
The true impact on your wealth from 401k hidden fees is ENORMOUS! While you may be aware of some charges, many fees are not required to be disclosed to you in the 401k or mutual fund prospectus.
And, even scarier, according to a
60 Minutes report, “401k Recession”, over your working career, this can result in your losing up to half of your nest egg!
By utilizing the
Infinite Banking Concept™, you can kiss hidden fees goodbye. All costs are already included in the premium, and by properly funding a participateing whole-life policy, you will actually experience reduced costs that are associated with other contracts. So, why not request a
Free, No Obligation Financial Analysis now?
Just click the link below to start enjoying the benefits:
http://legacyinsuranceagency.com/financialanalysis.html SCARY TRUTH #5:As you near retirement your money in your 401k is more at risk. This is because the losses can be greater as your plan accumulates over time. A market loss in your last working years could be devastating. In a recent story in
Time Magazine (“Why It’s Time to Retire the 401k”, October 9, 2009), they reported that during the recent market downturn, 401k’s of 55-to-65-year-olds lost a quarter more than those of their 35-to-45-year-old counterparts.
A dividend paying, whole-life policy actually becomes more efficient over time, and can provide you with peak growth at retirement, when you will need it most, without the risk associated with the stock market or other investments.
SCARY TRUTH #6:Borrowing from your 401k can cause double taxation! If you borrow money from your 401k, for any reason before you’re 59½, in most cases you’re required to pay back any loans back in full with interest within 30 to 60 days, or you’ll have to pay income taxes, PLUS a 10% penalty. But, what’s worse is when you repay the loan you are using after tax dollars, so you will end up being taxed again upon distribution.
With a whole-life contract you can set the rules for borrowing and repaying the loan. And, the money received from loans is tax-free up to the cost-basis. Another benefit is that a properly funded policy will also continue to grow, even with a loan against it. A properly trained agent can show you how to receive even more tax advantages from your policy. The average family could expect to recapture hundreds of thousands of dollars over their lifetimes, just by using their life policies as a resource, without having to depend on banks or other financial institutions.
SCARY TRUTH #7:Deferring income taxes could cause you to PAY MORE IN TAXES! And, that’s assuming tax-rates don’t increase at all. If you are deferring taxes now in a lower bracket, and you get normal cost of living raises, at retirement you could be in a higher tax bracket resulting in a higher tax rate. If taxes go up in the future, then things get even worse.
With a Maximum Efficient Contract, you could enjoy as much as a 150% better lifestyle at retirement without even touching your life insurance policy. If you make withdrawals from your policy, they could be completely income-tax free under current tax law.
SCARY TRUTH #8:
The government is in control of your Qualified Plan! And, just as they change tax laws every year, they can change the rules for your IRA. Think about what’s going on right now with government spending. Where will the money come from to fund these bailouts? Do you know that Congress has changed the rules on taxation of Social Security over the years so that now as much as 85% of Social Security income can be taxed?
So, why not take advantage of a properly funded whole-life policy that can give you protection and peace of mind without government control?
Qualified Plans: Trick or Treat?
Have a wonderful Fall Holiday!
Barry Page
Infinite Banking Think Tank Member
Financial Consultant
www.legacyinsuranceagency.comLearn more about Infinite Banking here:
www.infinitebanking.org
