Should I Convert My IRAs Or 401(k)s To A Roth? - YouTube

Roth's have only 2 benefits. Laser Funds have 6. In this episode, we are

going to address the question, "Should I convert my IRAs or 401Ks to a Roth.

So, get ready. You're going to gain insights into opportunities you probably

didn't know even existed. So, my name is Doug Andrew and I've been a financial

strategist for more than 45 years. But I've also been a tax minimization

specialist. Helping people retire and not outlive their money. So, this is a very

critical piece of information that you need to be aware of. "Should I choose a

Roth?" Because really only about 10% of Americans right now have Roth's. The

other 90% have traditional IRAs or 401Ks. And so many times, I'll use a little

metaphor to get them to think about this and say, "Let's say you were a farmer. And

you had the choice of buying your seed in the springtime and you didn't have to

pay tax on the price of the seed. But you plant it, you irrigate, you cultivate, you

work hard and in the fall of life. This would be retirement now. You agree to pay

tax on what you sell your harvest for." That's a traditional IRA, 401K. What if

you could just pay tax on the price you paid for the seed and later on, when you

sold your harvest, you were able to do that tax-free. And most Americans go, "Oh,

I'd rather have harvest be tax-free." Then why do you have all this money in those

IRAs and 401Ks. You're getting a tax break on the seed money not the harvest.

And they go, "Whoa, I've never thought of it before like that." So, when people begin

to realize they're not going to be in a lower tax bracket, when they retire

unless they have very little saved, it would behoove them to get the taxes over

and done with early. On the contribution phase. And enjoy the

distribution the harvest tax-free. Well, people think I'm talking about a Roth.

Now, a Roth is the step in the right direction. When did they start? 1997.

Senator Harry Roth was presenting this idea because Congress was hard up for

money. Now, they actually did this for them, for their coffers more than for us

but it was still a step in the right direction. And basically, he said, "You know

what? a lot of people are getting smarter. They're realizing it would be better

just to pay tax on the seed and enjoy the harvest without tax." So, let's

introduce a Roth IRA. And then a few years later it was a Roth 401K. Name it

after me." He wanted credit for that. Well, they passed the Roth and it was in 1997

under the Taxpayer Relief Act. And so, you could convert your traditional IRAs or

401Ks to a Roth. But when you do that you pay tax. That created tax revenue for

the government. That's why it was a windfall the government got. Because they

didn't want to wait around until you retired to get their portion. So, it was a

good deal for the government. Actually smart for many people. But a lot of

people in America can't own a Roth. They make too much money. There's strings

attached with Roth's. You can only put in a certain dollar amount of certain

percent of your income. You can't touch it for 5 years or till you're 59 and

a half. And and see it has all these strings attached. And so, Roth's only have

2 benefits. You take after-tax money and it accumulates tax-free and then you

can access your money tax-free. What I use is referred to by savvy CPAs and tax

attorneys as the Rich Man's Roth. You don't have to be rich to own one. But

because the rich can't own a Roth, this is what they choose. And so, I'm going to

share with you why the Rich Man's Roth which I call the laser fund has 6

advantages instead of just the 2 that a Roth has. So, why would I own a Roth? So,

the Laser Fund is what I call it. Laser is an acronym that I've used for years

that stands for Liquid Assets Safely Earning Returns. That spells Laser. But

it's laser focus. So, let me share with you the benefits. And then at the

end here, I'll show you how you can get educated by reading, watching, listening

however you like to learn. So, the Laser Fund is a maximum-funded tax advantaged

insurance contract that is structured to be used as a living tax-free

accumulation vehicle rather than as a death benefit. Even though there is a

death benefit which is sort of coming along for the ride.

This is where I have averaged 10.07% tax-free rates of

return for the last 25 years. Over the last 45 years, I've

averaged 8.2%. How come it increased to 10.07?

Because indexing wasn't around back in 1980 when I first started putting my

money in these. Indexing didn't come around until 1997. And that's why my rate

of return went from about 8 to 10 percent. Went up two percentage points.

I'll explain this in just a moment. So, what does a laser fund have as an

advantage? Why is it called the rich man's Roth? Because you not only take

after-tax money and it accumulates tax-free like Roth's. And you can access

money tax-free. But there's no no strings attached that are attached to the Roth.

So, for example, the third big benefit of a laser fund is that during banner'

years, you can put in a huge lump sums. I mean you could put in 2 hundred, 3

hundred thousand dollars if you structured it to accommodate that. Or you

could open a new one to accommodate that. You can't put that much money in a Roth

in a single year. But during down years, if you don't contribute to a Roth, you

can't make up for that in future years. With the Laser Fund, you can make up for

it. If you have room to put in 100,000 a year and you only put in

20,000, that means you had 80,000 of room that you didn't

use. Well, 2 or 3 years down the road,

you can make up for all the room you didn't lose. You don't have that

opportunity with the Roth. It's gone. If you don't use it, you lose it. With the

Laser Fund I can just make up for all the years that I didn't put money in

that I could have put in. What is the fourth benefit? If you need money for

anything, you don't have to prove a hardship. If you need money for anything,

you can access your money with an electronic funds transfer or a phone

call. There's no IRS handle these for for touching it be before 5 years, before

age 59 and a half or whatever. And so, I have a lot of clients who retired in

their mid 30's. They want to access money tax-free the rest of their life at rates

of return. A million generates about 100,000 a year if they're

earning 10%. They want to do that when they're 35. Not wait till

they're 59 and a half. And so, that's a huge benefit of the Laser Fund. Now,

there's 2 additional benefits you may not be aware of. So, with the Laser Fund,

you have indexing strategies as an option. Which I mentioned I've used since

1997. This is where my money is tucked safely in a multi-billion even some are

multi trillion dollar insurance companies. By the way, these companies are

where the government goes to when they need money. This is where banks and

credit unions put 30 to 40 percent of their tier one assets for

liquidity and safety. And so, I put my money in those. And they earned their

general account portfolio rate. And that's been as high as 15.5

percent back in the 80's. And it's been as low as about 4% when

interest rates are low. But when interest rates are high for earning, they're high

for borrowing and when they're low for earning, they're low for borrowing. And so,

if I have a million dollars in my Laser Fund, I can just hunker down and settle

for the (let's say) 5%, 50,000 of interest and it's tax-free.

That's better than most I raised in 401K actually earn on the average. Did you

know that? But in a year that I want, I can link my returns to an index of my

choice like the S&P 500 or the Dow Jones or the Russell 2000. My money is not in

the market. My million is still safe in the insurance company. They're taking

that interest. Let's say 5%. That 50,000 of interest are

earning on my money. And they're buying upside options in the index that I chose.

And so, my million is not at risk. That's safe. But if the market loses, I don't

make anything. But I didn't lose the million. I relinquished the for-sure 5

percent. But if the market goes up, they're able to pay me what the market

does. And sometimes it has earned 10%, 15%. Some years like 2017,

25%. But here's the key: If I earn 25% like I did

in 2017 on a million bucks, that's 250 grand.

Now I have a 1,250,000 in my laser fund. If the

next year, the market dived 40%... Okay? If it just doe. Instead of my

million going down to 600,00 or my million to fifty losing

all the money I just made, you don't lose the 250,000 you

made. I still have a million two fifty. I didn't make anything the next year. But I

didn't lose because I locked in the gains from every year. You lock in the

gains and the next year if the market goes down, you never lose due to market

volatility the money you've made in the past. That is the wonderful benefit of a

Laser Fund. What is the last or sixth benefit that a Roth never has? Well, when

you ultimately die because none of us are getting out of here alive. I mean,

that of this life. And so, when you pass away, a Laser Fund increases in value and

transfers tax-free to your heirs, your spouse, your kids, your grandkids. Even a

charity. What that means is if I were to die right now (I'm 67 right now)

and every... If I had a million in a Laser Fund account, that million would blossom

to about 2.5 million instantly and transfer to my heirs

tax-free. There's not a Roth around that will do that. And people say, "Well, how

much does that cost?" Nothing. It's coming along for the ride on my Laser Fund. It

is being paid for with a minuscule portion of money that you would pay in

taxes on a traditional IRA or 401K. You would have to be earning 15% to net 10.

I only have to earn 11 to net 10 in a Laser Fund. And that 1% is paying for the

cost of the insurance that the IRS says has to be there or it won't be tax-free.

I am safer in a Laser Fund. So, those are the 6 advantages. So, when

people ask me, "Doug, what about a Roth?" I go like, "Why in the world would I own a Roth

when I can have the 2 benefits of a Roth and a whole bunch more at no

additional cost?" What are the benefits? It accumulates tax-free. I can access it

tax-free. But I can put it in large lump sums. I can make up for years. I didn't

put in the maximum allowed. I can access money any time for any reason without

any IRS penalties. I can then ride the market up tax-free and I don't lose when

it goes down. And when I ultimately die, it blossoms in value and transfers

tax-free. Hello! This is why I've never owned an IRA or 401K. Never will. I've

never owned a Roth. Never will. Because the Laser Fund is superior. If this is

resonating and you want to learn more about this, I've written a book called

The Laser Fund. And you can click on this episode here learn a little bit more

about that and then I will send you a free copy of that book. You just pay $5.95

shipping and handling and you can learn more about how the Laser Fund can

empower you.