With very few exceptions, taxes are the biggest financial burden the average American will encounter in their lifetime. In fact, over 30% of every dollar we earn will go to taxes in one form or another. Its no wonder then that taxes can be such a divisive issue. More than that, it is one of the most significant topics that you should discuss in depth with your financial planner.

Why do we dislike paying taxes? Other than the obvious destruction to long term wealth there are philosophical reasons. Perhaps you don’t feel as if your tax dollars are being spent efficiently. Perhaps you are morally opposed to taxation in general. Perhaps you disagree with certain programs that receive funding through taxes. In any of these cases, you will find that it is quite possible to drastically reduce the amount of your money that is diverted to paying taxes.

What if you could have complete control over how your taxable assets are handled after you are gone? What if you could have very broad control over your taxable assets while you are still alive? What if you could take the value of your tax qualified money (IRA, 401K, etc) and bypass giving any of it to Uncle Sam while at the same time leave 2-3 times that amount to your family TAX FREE?

Tax efficiency goes way beyond contributing to 401k’s and IRA’s. It involves digging in to the real core of what Family Values you want to protect and pass on. Most of all, it takes a plan. Often times we work with clients who think that they don’t need to worry about their tax efficiency. These may be people with little to no family or family they don’t necessarily care for. The truth is that you don’t need a large or close family to leave a legacy to in order to benefit from a tax efficiency strategy.  All that is required is a vision created from your experience assets, your core assets, or your contribution assets. Your financial assets will help your to fulfill this vision after you are gone.

Most surprising to most of our clients is how much fun this particular piece of planning can be when done correctly. It opens up doors to philanthropic endeavors, and investment potential that they had never before considered or thought possible. That is why we highly encourage you to contact us immediately to learn more about this most important aspect of your Financial Planning.

How to leverage life insurance for tax-free retirement

Tax-free retirement accounts can be difficult to achieve.  In the case of Roth IRAs and Roth 401(k), the only tax-free retirement accounts, eligibility requires shelling out a substantial annual sum.  These also come with salary restrictions. A good way of enjoying a tax-free retirement account, therefore, is to leverage life insurance. Here’s how you do it.

Life insurance can be set up the same way Roth IRAs and 401(k)s work but without the limitations on contributions or salary caps.  Though you won’t get tax deductions from your premiums, your money will grow tax-free. And it is also important to know that these accounts won’t incur IRS penalty fees for withdrawal before an account holder reaches the age of 59 ½.

Now that you we have scratched the surface. Let’s get started on your plan.