Money that grows under tax-favorable circumstances is money that not only grows, but remains your money. Knowing how to accumulate your money tax-free, rather than just tax-deferred, means that your nest egg remains intact instead of losing a third or more of it to Uncle Sam.
But this is only one advantage. Being able to access your money tax-free at some later time--even if it's just a year later--and having the ability to ultimately transfer what remains of your nest egg tax-free to your survivors at the end of your life are advantages too.The only ultimate vehicle that accumulates tax-free and then allows you to access that money totally tax-free and finally, at your passing, blossoms and increases in value and transfers tax-free is the Maximum Funded Tax-Advantaged (MFTA) insurance contract.
To reap the tax-free benefits, it is essential that your MFTA insurance contract is structured and funded properly in order to make full use of the tax-advantaged strategies grandfathered into the IRS code for many years. Many financial advisors don't understand how to do this, so you'll need to choose wisely. Those advisors who do know exactly what their doing, have seen their clients enjoying net, cash on cash rates of return averaging 8.2% for the last 38 years. This is in addition to having their money grow totally tax-free. Remember, this is all done in full compliance with Internal Revenue Code Sections 72e, 7702, and 101a, which have been around for nearly a century.Once you comprehend the difference between tax-advantaged and tax-deferred savings, you'll wonder why anybody would ever go with the latter.
Basic Savings Scenarios
When it comes to accumulating your money, you can choose to do so in investment and savings accounts that are taxed-as-earned. This is the most common way that people save, but it's also the worst way. To illustrate why this is, remember that a dollar that doubles every period for 20 consecutive periods will grow to $1,048,000 if it is tax-deferred or tax-free. But if it is taxed-as-earned, and that dollar doubles to $2 and you have to pay tax of, let's say, 33% between federal and state income tax, that leaves you with just $1.66. If that amount doubles and you pay tax on that gain, at the end of 20 periods you'll only have about $27,500. See the difference? Taxed-as-earned leaves you with just 2.7% of that money's potential.
One of the things that separates the super wealthy thrivers from the rest of us, is that they understand the power of compound interest and the incomparable advantage of accumulating wealth in a tax-advantaged environment. When these two elements are combined with the power of safe positive leverage, which is the ability to own or control assets with very little of your money actually tied up in the asset, real wealth can be achieved.
If your money is in an IRA or 401(k) right now, there are huge advantages going unrealized. Most Americans don't understand this, but if they did, they'd be looking for a better way. That better way has been here all along, it's just not widely known by most.There's no shame in not knowing what you don't know, but there's a tremendous advantage in understanding how these Money Mystery work and how they can help you take ownership of your future.
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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific info regarding your individual situation. The options expressed and material provided are for general information, and should not be considered for the solicitation for the purchase or sale of any product security.