The Fed’s tax revenue is up by a startling 14% from last year. And The Washington Times recently reported that tax revenue collected in April was at a record breaking 472 billion.
However, another record breaking statistic is the amount of total taxes collected in the 2014 fiscal year, which was a whopping $3 trillion! This is the highest amount of revenue the Feds have seen in history!
If you’re like me and are shocked by these statistics, you probably feel that you are paying too much in tax. Paying too much in taxes results in a negative effect on my retirement savings, and probably yours as well.
After filing my 2014 taxes, my CPA told me I paid 6% more in tax last year compared to the year before. This 6% increase was not because of the extra income I made, but because of what the federal government did with the disbursement of wealth i.e. The Affordable Care Act (Obamacare), and other government entitlement programs that taxpayers’ support.
Though the government is mandating more tax from us for subsidy programs, doesn’t mean we need to financially suffer – especially when it comes to our retirement.
Paying Less Taxes
What can be done to your financial plan to reduce taxes during retirement and keep your assets private?
I’ve chosen to allocate a portion of my income to Whole Life Insurance.
By using whole life insurance in your financial plan, it can allow you to slash your future tax bill and save more money.
Your money placed inside a Whole Life policy acts as a tax shelter because your policy grows tax free, and you can receive retirement disbursements without penalty or tax.
A whole life policy is a private contract between you and a mutually owned insurance company, the government cannot interfere with that contract like they can with other retirement plans.
How Cash Value is the “Kicker”
The distinct difference between term insurance and whole life insurance is the cash value. Cash Value comes as a game-changing feature to a whole life policy because of the death benefit.
As a policy owner the death benefit is your leverage with the insurance company. The more you pay into your policy to fund a death benefit, your cash value simultaneously increases, and you can borrow more from the insurance company. This contractual benefit is what enables policy owners to access liquidity at any time and for any reason. As mentioned before, Whole Life Insurance is also a private asset – no reporting to the government or IRS of the cash value.
This strategy can increase your savings dramatically as well as give you the freedom of liquidity during retirement. Properly structured whole life insurance can not only protect your assets, but keep them completely private too. By adding whole life insurance to your financial portfolio you can create a life of tax free income during retirement.
Listen – The Economy and Your Retirement