With April finally upon us, spring is in the air and the anticipation of warmer days ahead gets me excited for the days to come.
For those who enjoy playing and watching golf, the spring also brings the Masters golf tournament and for some, the start of the golf season. We get to dream again of those big drives down the fairway and birdie putts that keep us coming back for more…pain that is. It’s frustrating but fun at the same time.
Unfortunately this time of year also reminds us of a topic which most do not have a warm and fuzzy feeling about…that’s TAXES. As the saying goes, “the only thing certain in life is death and taxes“.
Over the last few weeks, I’ve heard countless complaints of people upset by the amount of tax they have to pay. From federal, state, local, property, sales etc…it can add up to sizable portion of where you money goes; for some it could equate to 40-50% of their gross income (historically we’re at low tax rates now).
Remember, it’s not what you make, it’s what you get to keep. The more you can keep along the way, the more you can save and invest…pretty simple.
So where can you save your money most efficiently? Putting your safe money into vehicles such as savings/checking accounts, money market or CDs aren’t earning enough to keep pace with inflation and the earnings are taxable. Yes, it’s liquid but you’re losing money each year.
For most, their main source of saving money is in their qualified plans such as a 401k. Yes, you get to defer tax and maybe get a company match, however have you ever thought about how much control you’re giving up and possibly setting yourself up for a significant tax burden later in life?
The risks increase for these types of accounts as no one knows what the market or tax environment will be when you need the money.
Check out this post regarding the risks associated with your 401k.
So what can you do to gain more certainty and true tax advantages? The best place we have found to save money (no chance to lose principal and is liquid) is in specially designed permanent life insurance.
Not only will you be saving money that exceeds bank rates by 3-4x but the earnings are tax-free, cash value is accessible to use throughout your life, and you get the permanent protection of your income and wealth when you pass. Not a bad deal.
Watch the video below to learn more!