Strategies for Making Your Taxable Retirement Plan – Tax-Free

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Estate Planning, Executive Benefits, Key People_Or Group, retirement, Tax Efficient, Tax Free Income

By Thomas J. Perrone, CLU, CIC 

Retirement plans such as 401(k), IRA, 403(b), Cash Balance, Profit Sharing, and other qualified plans are popular choices for securing one’s future. While these plans focus on accumulation and stock market returns, which can be quite exciting, there are significant drawbacks associated with them.

Although retirement plans offer the appeal of disciplined savings and the potential for growth over time, they also come with inherent risks that are often overlooked. These plans, designed to assist participants, can sometimes result in financial shortfalls or unforeseen tax liabilities. The unpredictability of market performance and regulatory constraints may cause participants to question the adequacy and reliability of such strategies. Addressing these concerns proactively is essential for ensuring a smoother retirement journey and providing stronger security for loved ones.

Life insurance can help mitigate these downsides. However, there are several critical discussions that are seldom addressed when dealing with qualified retirement plans:

  • Future taxation: 100% of the funds are taxed upon withdrawal.
  • Death, disability, or termination of the plan: These events can significantly affect the ultimate outcomes for the family. For instance, if the participant dies five years into the plan, the family may not receive the anticipated benefits.
  • Sufficiency: Will the plan provide 60-75% of your final earnings?
  • Contribution limits: Participants may struggle to contribute enough to create the principal needed to achieve the desired percentage, particularly highly compensated employees.

These issues can be addressed effectively by incorporating life insurance into the retirement strategy.

The accompanying video explores some of the most pressing questions regarding retirement plans.

Learn about the JFK ERA benefit plan used for high earners, a plan that will create tax-free benefits with very few restrictions. This is a plan every Business Owner should know about.

Get your FREE REPORT– CLICK THE LINK BELOW

https://www.allclients.com/Form3.aspx?Key=277641709EAD8CD47ED41034FB533AB4

Thomas J. Perrone, CLU, CIC

tperrone@necgginc.com

Leave a comment