Don’t Settle for Less. How to Maximize Your Portfolio by Avoiding Taxes at Withdrawal

Traditional qualified retirement plans allow you to take a tax-deduction on contributions to your plan. It feels great to fund your retirement and get a tax break, doesn’t it?

But there’s a catch, and it’s a big one. When you retire and start your withdrawals, you’re going to pay taxes on every dollar. And, those initial dollars you contribute will have grown substantially, right? That IS the whole point.

So, you’ve gotten a tax deduction on your (comparatively small) contributions so that you could have the privilege of paying taxes on the (comparatively large) withdrawals. Does that make sense?

Imagine a farmer who spent $10 on seed for an acre, and took a tax deduction. A year later, he harvests his produce and sells it for $1,000, and pays taxes on the $1,000. Wouldn’t it make more sense to have paid tax on the $10, and then enjoyed the harvest tax-free?

Ah…but what if your employer is matching your contribution? And what about the tax-deferred growth?

It’s simple. Max out your contributions to your qualified retirement plan so long as your employer matches it. But any money you’re saving for retirement that isn’t getting a match should be redirected, to a simple and safe, investment vehicle that will provide you with tax-free income after retirement.

Click here for an informative brochure showing you how you can achieve tax-free withdrawals with an IUL.

If you’re like most people, a few simple changes to your portfolio can have huge benefits for you down the road. We can figure that out in a phone consultation. To set a time access my online calendar using the link below to pick a time that works for you.

Integrated Life and Financial Planning does not offer legal or tax advice. This material is not intended to replace the advice of a qualified tax advisor or attorney. Please consult legal or tax professionals for specific information regarding your individual situation.

“No theory, strategy or Asset Allocation assures success or protects against loss. This material is for general information only and is not intended to provide specific advice or recommendations for any individual.  To determine what appropriate for you, consult a qualified professional.”