WARNING: mINImIZING RISk cAN lEAd TO A GOOd NIGhT’S SlEEP & PEAcE OF mINdto yield 4.8%, and the profits will continue to compound tax deferred.
Investing in a tax-deferred vehicle means your money can compound
interest for years, deferring income taxes and providing the potential
to earn interest at a faster rate. While very few financial vehicles avoid
taxes completely, insurance products allow you to defer paying them
until retirement, a time at which you may be in a lower tax bracket. The
higher the tax bracket, the more advantageous and important are utiliz-
ing tax-favored products and structures to your portfolio.
If you’re a business owner, you have the opportunity to use business
dollars, not only to attract, retain and keep high quality employees, but
also to fund your own retirement. Non-Qualified Executive Bonus Plans
became popular in the 80’s when tax rates were higher to take advantage
of the tax-deferred compounding and tax-favored status when accessing
the money.
4) keeP YoUR PRoFIts; hAve A PlAn
InClUDIng estAte tAx PlAnnIngPeople don’t plan to fail, they simply fail to plan. Baby Boomers and
retirees should not be in the market unless they have a plan for when
the market goes up as well as a plan for when the market goes down.
I can only think of one reason to be in the market and that’s to make
money! Can you think of another reason? But if you are like most
people, you have a stockbroker or advisor without a comprehensive
plan. You watch your brokerage statement and the market go up and
down, but without any control to keep your profits. So why don’t you
have control over your retirement monies that you worked so long
and hard to make? Has your broker ever called you up and said, “Hi
Mr. Smith, I see your investments were profitable in XYZ company.
Why don’t we sell that and stick those profits in the bank? Maybe
take your spouse on that cruise they have been talking about.” Never
happens, right? If anything, they tell you to sell and then want you to
buy another investment, and you’re right back in the market. That’s
equivalent to going to your broker one day and saying, “Here’s my life
savings. I hope and pray that one day when I need it, it will be there.”
Well hoping and praying isn’t a strategy! We invest in the market and
choose to take on the risk to make money in our younger years, when
there is time to make up for downturns. In your 50’s, you should have
a plan and goal with your advisor to ensure that you keep your profits