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  • Joe Myers

The Daily Deposit - December 2022

Smart Money - Dec. 2022



The tax preparer attempts to reduce your current tax bill - we strive in lowering you lifetime tax bill.


Life Insurance VS. Tax Qualified Plans

Most people want to achieve two things when they are close to retirement:

  1. DEBT FREE (including mortgage)

  2. Have safely secured money for income once retired.

The tax burden in a "tax qualified plan" is not eliminated, it is simply just put on hold. You cannot avoid paying taxes in qualified plans.


Think of these 3 questions when planning for your financial future:

  1. Do you want to make more money every year you are in business?

  2. When you retired would you like to keep the same lifestyle?

  3. Do you think personal income tax will increase, by the time you retire?

The below chart* is the Marginal Tax Rates from year 1913 to 2014. In 1913 the unconstitutional Federal Reserve was created along with the unconstitutional IRS and an income tax was established that was supposed to be temporary and NEVER to exceed 7%. WHEN ESTABLISHED, INCOME TAX WAS NEVER TO EXCEED 7% DECEMBER 2022 THE DAILY DEPOSIT The highest Marginal Tax Rate in 1913 was 7% which only lasted for 3 years and then jumped from 7% to 77% in 1918. It was at its highest of 94%, from the years 1944 to 1945. The National Debt in 1987 was right around $2.5 Trillion but, today the National Debt is over $31 Trillion and growing. With how congress operates today, this is likely the lowest income tax bracket we will see in our lifetime.


*(SEE ARTICLE ATTACHED FOR IMAGE)


By being in an overfunded tax qualified plan, like a 401k, means you could be giving back the majority of your social security. The withdrawal amount from your alleged "tax savings account" is going to be subject to 85% (highest) of your social security to income tax. Not only will taxes be owed on what you paid into the tax qualified plan at an agreed upon, higher amount, but you will be taxed on your income (determined by your tax bracket). If we know taxes are going to be higher at the end of the game, why would we be advised to defer taxes to the future?


By using tax qualified plans and deferring taxes now or until retirement, there is a real possibility you could owe more in taxes than what was saved in a tax qualified plan. These plans are like borrowing money from someone, and they will not tell you what the loan rate will be. The real question in planning is the end game and what it is going to look like. Putting after tax money in a NEVER taxed environment allows you to plan for your future.


Building a system of properly structured, Dividend Paying Whole Life (DPWL) insurance policies, over your lifetime will create a better, stress-free outcome. Unless congress makes a change, you will not have to file a tax return for distributions and your social security will not be affected. When you use your cash values of, properly structured DPWL policies, to recapture the VOLUME OF INTEREST that you are giving to lending institutions or when paying cash, there can be tax major tax advantages. Using the IRS code to your advantage, where you can build wealth and manage your wealth outcomes. Properly structured DPWL life insurance never loses money in any stock market correction, it is guaranteed to be worth more every year and not subject to federal income tax, if properly used. Tax qualified plan problems are not isolated to just those plans. You could have the same tax issues with money that is warehoused in "investments", like stocks. When you sell your stocks there is a capital gains tax to deal with, it could also affect the same issues detailed above.


Things we could help show you:

  1. WHERE your money is located is more important than HOW MUCH you earn.

  2. a guaranteed positive outcome in an uncertain future

  3. achieve what you want financially for retirement

What is your exit strategy?


A taxpayer who is educated on taxes will pay less income tax in their lifetime.


Contact us to learn more about how delaying taxes is destroying your wealth.

The Daily Deposit - December
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