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Missed Fortune – Why Tax-Free Beats Tax-Deferred Hands Down

Posted on | December 9, 2012

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Losing the Confusion

There’s a lot of confusion among many Americans as to what they should be doing to protect their financial futures from rising taxes, higher inflation and continued market volatility.

These three factors constitute a coming triple whammy that could drastically affect the retirement savings of millions of Americans. Whether you are a business owner or simply someone preparing for or nearing retirement, it’s essential that you take ownership of your future. Those who choose to do nothing are taking a huge risk of outliving their retirement savings.

By taking ownership, you can divert otherwise payable taxes into other causes that you support. There’s no need to feel powerless or isolated by your circumstances when you have the right strategies in place to point you toward a brighter future.

With clarity you gain the confidence and necessary creativity to help you implement alternatives that you may not have known existed.

Imagine how you would feel when you have in place the definitive game plan with the necessary steps to allow you to enjoy safety, security, and freedom to enjoy the most important people and things in your life.

Some of the biggest roadblocks that prevent people from reaching these goals are market volatility, record low rates of return, and having to pay unnecessary taxes. Once you understand exactly how these roadblocks affect you, you can get rid of them and enjoy the fruits of your labors. With these dangers gone, you can seize the incredible opportunities that most people don’t even know they have.

This includes knowing how to convert your retirement savings plan from the traditional IRAs and 401(k)s where your taxes are deferred to some future time into a better savings vehicle. This means a savings plan where your money can grow tax-free, distribute tax-free, and transfer tax-free to your loved ones when your life is finished. A strategic rollout can make a world of difference.

The Difference You Must Understand

People who have followed the crowd and kept their retirement nest egg in traditional accounts like a 401(k) or IRA are banking on the idea that they’ll be in a lower tax bracket when they retire. The sad truth is that many of them will experience a rude awakening when it comes to their future tax liabilities.

One reason for this is that tax rates are more likely to go up than they are to go down. Even if new taxes aren’t levied, the likely expiration of the Bush tax cuts will result in a significant tax hike for most Americans.

A second part of the rude awakening will be rooted in the fact that, at retirement, few of us still have access to the tax deductions that were available during our peak earning years. By retirement, our homes will be paid off, our dependents will have grown up and moved away and our tax liability may actually be higher than when we were working.

The great danger here is that by deferring our taxes to some perceived future advantage by accumulating our nest egg in an IRA or 401(k), we will give up at least a third of our saved money in taxes to Uncle Sam. When you’re left with only 2/3 of the nest egg you thought you had, and you’re being taxed at a higher rate on what you’re pulling out of your account, the likelihood of outliving your savings increases. That ‘s a sure recipe for an uncertain future.

This is why it is essential that you learn the Missed Fortune strategies that have been helping people enjoy liquid assets safely earning a predictable rate of return for decades. The miracle of compounding can only be fully realized when your money is accumulating in a tax-free, rather than a tax-deferred, environment.

Learn what you need to know and take ownership of your future by visiting with a Missed Fortune advisor today.

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*Life insurance policies are not investments and, accordingly, should not be purchased as an investment

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