401(k) vs. Tax Free Business Pension

401(k) vs. Tax-Free Business Pension

Given federal income taxes will increase 55% within 6 years according to the US govt, click here for proof, why would anyone choose to defer when they pay their taxes? Most prefer tax free income but do not know how to set that up. Contact us by clicking on the contact form button at the bottom of this page and we will show you.  The limitations of a 401(k) or IRA are shown below and the advantages of tax free income are shown below as well.

Just by changing HOW YOU PAY YOUR BILLS, reducing tax funds you are currently giving to the IRS will pay for your Tax free Business Owner Pension.  What have you got to lose?  Get in touch by filling out the contact form below.

Title

  1. Limits on contributions
  2. Early withdrawal penalties before age 59 1/2
  3. Whether or not you can access any funds is complicated and subject to every changing government regulations.
  4. RMD (Required Minimum Distributions) must be done properly or taxes and penalties.  50% penalty on improperly calculating your RMD.
  5. Although you fund the account, government bureaucrats have all the control and your future is subject  to their whims.
  6. Tax deferred (taxes are going up dramatically). The US govt says 55% within 6 years.
  7. ERISA limitations

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  1. No Limit on contributions (based on cash flow & qualifications)
  2. Tax-Free Income (taxes are going up)
  3. Liquid from year-one onwards (increasing liquidity the longer you are in the plan)
  4. Tax-Free Living Benefits if you become disabled or seriously ill
  5. NO early withdrawal penalties
  6. Very limited government control
  7. NO ERISA limitations
The graph above shows how $100,000 may have looked like in these different types of accounts over the years.  Folks, even if you hardly know much about investing, where would you rather have your money in — the green, red or blue line?  Most everyone would say the green line for obvious reasons — there’s way more money there, right?
Well, it gets better!  The money on the green line can be accessed any time, for any reason, and it’s TAX-FREE!  And did you notice that the green line never once lost money when the market (red line) dipped?  By the way, the money on the green line comes with several other awesome benefits that we can further explain when we chat but just knowing the above, most folks would quickly ask how they can switch over due to the fact that this type of account never loses money, and is accessible any time with NO penalties or taxes.
The red line is the Standard & Poor’s 500 index, 500 of the largest stocks in the USA.  And if you look at the $188,016 figure, about 95% of mutual funds do not out perform the S&P 500 index, meaning most people who are in mutual funds, 401k’s, IRA’s, 403b’s and so on, actually have less money than this $188,016 figure.  And they would still have to deduct fees, which averages around 3% (this can be anywhere between 1.5% to 5%).  Many people aren’t even aware that they’re paying these fees because they are hidden in what looks like a phone book written by a lawyer and it’s called a prospectus.  With a $100,000 balance, that would be about $3,000 each year in fees whether you make money or lose money!  If we multiply this by 15 years, that’s $45,000 in fees alone!  But remember, we still have to take taxes out!  And if we’re looking at 10, 15 or 20% very conservatively in taxes, you’re about where you started 15 years earlier.  Sad.  Very sad indeed.  ?  You put in 100% of the money, took 100% of the risk and ended up about where you started 15 years earlier.  The mutual fund company put up 0% of the money, took 0% of the risk, and yet made $45,000 in fees in the process.
Sadly, about $17+ TRILLION dollars are on the red line today.  We would venture to say that most folks would prefer to have their money on the green line any day once they are aware of all of the fees and taxes that will impact their account balance heavily.
If a light bulb just went off in your head after seeing this illustration and reading the above, and you’re feeling some anger slowly bubbling up, don’t worry!  Put that energy to good use and Contact Us Today!  Let us chat and see how we can help “rescue” you from your current situation and get you on the right path!

209-814-6865 | JLM@BankingLikeTheRich.com

Disclaimer: The material presented on this site is included with the understanding and agreement that BankingLikeTheRich.com is not engaged in rendering legal or other professional services by posting said material. U.S. Treasury regulations require us to inform you that any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person or entity for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. The services of a competent professional should be sought if legal, accounting, tax or other specific expert assistance is required.