How To Invest For Retirement Without A 401(k) - YouTube

This blows 401Ks out of the water. In this episode, I'm going to address the

question "How to invest for retirement without a 401K?" Now, you're going to learn

that I've never owned an IRA or 401 K, never will. I've never owned a roth-IRA

or 401K, never will. Here is why. Stay tuned.

I'm Doug Andrew. I'm in my radio studio. I've been blessed to have

a radio show now for 12 years where I

produce a new show every single week on helping people optimize their financial

assets and minimize taxes and prepare for a comfortable retirement so that

they don't outlive their money. Many times, people will ask, "Golly, how can I

invest or prepare for retirement if I don't have a 401 K?" And I go, "Consider

yourself blessed because I am NOT a proponent of 401Ks or IRAs. I never have

been. I never will be." And people say, "Really?" Yeah. Let me tell you something.

I've authored 11 books so far. Here some of them. And in all of my books, I

prove that the method of socking away money into a tax deferred vehicle like

an IRA, 401 K or a 403 B or a 457 plan. These are all qualified plans. It's based

upon a false premise. That's that? See, when they first came out, the government

sort of said, "Hey, we'll let you put in pre-tax dollars into these vehicles and

it will grow to a bigger sum of money. And then when you retire, you can pay tax

in your retire years. And then you can pay tax during your retirement years. And

you'll be in a lower bracket then." Well, that sounded like that makes sense but

that has not been true for more than 25 years. People are not in lower tax

brackets when they retire. The only people and I can probably count them on my hand

that I help that are in lower tax brackets, it means they didn't save very

much. Is that why you you want to be in a lower tax bracket? No. Why does that

happen? It's because people go down the highway of life, so to speak trying to

achieve a destination of financial independence. And they have one foot on

the gas pedal and the other foot on the brake pedal and they don't even know

they're doing it. They put money into these tax-deferred accounts, pre-tax

dollars thinking they're going to be in a lower bracket but they have the other

foot on the brake pedal throughout their working years. How? They pay off their

mortgage so they kill that deduction. In retirement, they no longer contribute

money to I arrays a 401K so they have killed that deduction. The kids are gone.

And so you don't have those deductions. If you're a business owner, you don't

have those deductions. Congress keeps raising taxes. So, most Americans are in

as high or higher tax brackets when they retire than they were ever in during

their earning years. But let me give you some shocking facts and actual articles

that poopoo the 401 K as the best retirement plan. I've written several

books as I mentioned. My third book, Last-Chance Millionaire was written to

an audience of 78 million baby boomers that were probably going to outlive

their money. Unless they could accumulate at least an extra million bucks that

could generate a 10% payout. $100,000 a year of

tax-free income if they retired at age 65 or 70. If they live to be 120, very few

vehicles can do that. Most IRS a 401 K can't come close to doing that. The

financial services industry usually has people put money in tax deferred I

arrays in 401 k's in the market. And DalBar who studies investor behavior says,

"Because people are buying and selling at the wrong times out of emotion, when the

market takes a nosedive, they wait and they wait because their advisor says,

hang in there, hang in there. The market always comes back. And after it drops 30,

35, 40 percent people say, "Enough already and they sell low. And when the market

does turn around, they wait, wait, wait, wait, wait and until it's clear up here

and they buy high." And that's why the average

return for retirees who have their money in the market is only 3.49%

on in a 20-year period. You can pick out of a 20-year period since

the Great Depression. And so Dalbar says it's 3.5%. The

financial services industry says, "Don't ever illustrate more than a 4%

payout because we don't want to be sued for people out living their money." See,

Wall Street was built to keep your money invested. And if you ask them when's the

best time to get my money out of the market, they will always say "never'. It was

designed to never take your money out of the market. So, when you have your money

in the market, it's very hard to create predictable cash flow when you have 2

and 3 year downturns in the market like 2001 to 2003 or 2008. When people

lost 40% in one single year and it took 4 years to make back that 40

percent that they lost. That happened twice from 2000 to 2012. People who had a

million bucks in 2000 barely had their million dollars back at the end of 2012.

Clients using our strategies had tripled their money in that same 12-year period.

A million and the year 2000 was worth 3 million in 2012 using indexing. And

it was totally tax free. So, before I give you a little glimpse of about what that

is and my favorite vehicle, the problem with I arrays in 401Ks is people are not

in lower tax brackets. And so, in 2008, when the market dropped 40% like I

mentioned, the front cover story on Time magazine said, "Why it's time to retire

the 401K and do something better instead?" Now, Stephen Gandil was the author of

that article. And he said, the 401K is a financial flop. A rotten repository for

our retirement reserves." He said, "It's because people have their money in the

market and you cannot create predictable rates of return or income." Now, I also had

been telling people it's not the best tax strategy. I want to make sure I don't

lose when the market goes down. But see, IRAs and 401Ks are based

upon the premise you're going to be in a lower bracket. And people aren't in lower

brackets. What happened a few years later? Other articles came out about why the

401K is not the best place to put their money or Americans should not put their

money there. And then a couple of years ago, in January, the Wall Street Journal

had an article "The Original Champions Of The 401 K ___" The ones who came up with it

and said this is the greatest thing since sliced bread.

"The Original Champions of the 401 K Lament The Day They Ever Came Up With

That Idea." Why did they say that? It's because it is not performing well for

predictable cash flow in retirement. People are not in lower tax brackets. The

market volatility does not allow them to be able to rely on predictable income

streams. So, that's why with many of my clients, I would get them out of the

market starting at least 5 years before retirement. Get the taxes over and done

with on their yet-to-be-taxed IRAs and 401Ks and reposition the net after-tax

money into something that was going to be tax-free from now on. And I earn rates

of return more of the rates of 8, 9 and 10 percent average. Some years

15, 20, 25 five percent but averaging 10 net. That means every

million bucks could generate 100,000 a year of tax-free income

versus the average IRA or 401 K in the market, was only generating 40,000 a year

based on that 4-percent rule. But they weren't netting 40,000. They had

to pay tax on that. If they paid 13,000 in tax, they only netted

26,000. If the asset manager was charging one percent asset management

fee which many do or more than that, on a million dollars, that's another 10

grand. People are only netting 2%. That's really pathetic. Wouldn't

you rather have 8 or 10 percent instead of 2%? That's why you

want to convert to tax-free and make sure you're not subject to the market

volatility. When the markets go down, you don't lose. When the markets go up, you

get to benefit without your money at risk in the market. And that's the

power of indexing. So, let me tie these little knots together and connect these

dots so to speak so,that you can understand. And then I'm going to show you

how you can get a free copy of this book that will explain what I'm talking about

if you would like. So, what are the key takeaways about what I've said thus far?

If you have your money in a tax-deferred IRA or 401K, it's based on the wrong

premise. You're not going to be in a lower bracket when you retire, I can

almost assure you. So, why do you want to continue to postpone until a the

inevitable and compound your account into this big amount when you're

convinced taxes will likely be higher in the future? That doesn't make sense. Most

Americans that I ask "Do you think future tax rates will likely be higher?"

Overwhelmingly, yes. "Well, then why do you want to keep postponing?" You do a

strategic rollout as I said. And that's explained in this book that I would love

to gift you. The second thing is you want to switch from tax deferred to totally

tax-free. In order to do that, you've got to get the money out of those accounts, IRAs

and 401Ks, get the taxes over and done with. And then reposition the

net after-tax money into something that's going to be tax-free from now on. One

of the reasons why I like what I call the Laser Fund, a max funded tax

advantaged indexed universal life insurance contract. Because at the end of

the day when I die, it blossoms in value and transfers tax-free. And actually

reimburses me many fold that taxes I paid when I rolled the money out earlier.

So, I'm not out anything. I actually come out ahead. Now, you want to sprint towards

retirement. So many times IRAs and 401Ks, you're jogging. Jogging is okay. But

you can sprint. What do I mean by that? You can be earning more like 8 to

10 percent rates of return instead of 4 percent rates of return. It can be

tax-free. You will accumulate a million dollars that you get to use for gas,

groceries, prescriptions and golf green fees. A million bucks generating

$100,000 a year for as long as you live is way better than even

the same million in IRAs and 401Ks. Only giving you 40,000 a

year that you still have to pay tax on and fees on. When I quote you 10%

out of an insurance contract, that's net of all fees and expenses. Now,

I'll admit. Some advisors say, "I've never seen one that does that." Well, it doesn't

mean they don't exist. Just because you haven't seen it, doesn't

mean it doesn't exist. I mean, how do you know your brain exists, have you ever

seen that? See, it's such stupid reasoning in my opinion. The message here is earn

more like 7 to 10 percent tax-free rates of return. Create predictability

with an instrument that was designed to give you cash flow because money in the

market has never been designed to give you predictable cash flow. It's too

volatile. Experienced 8 to 10 percent payouts. So, here's how you can

learn more about this concept yourself. So, I mentioned that I'm an author. And in

many of my books, I love to educate people like you on how to optimize their

assets and minimize taxes and reposition a lot of the retirement income into what

I call the tax-free bucket. For example, I've helped many people reposition their

retirement assets to where 40 to 60 percent of their income doesn't

even show up on their tax return when they retire. And they go, "I didn't even

know this was possible. This sounds too good to be true. This is like a miracle."

What does this mean? People would come to me and money out of their IRAs and 401Ks,

maybe, if they were lucky could generate 160,000 a year of

income because they had 2.5 or 3 million accumulated. I go, "Way to

go. But you have another 40,000 coming in from your school teacher

pension or Social Security or whatever." The problem is all 200,000

is showing up on your 1040 tax return. "Well, is there a different or better way?"

I go, "Yes." In 5 years, I took many people and we transferred 120,000

60% of that 200,000 off of their 1040

tax return. The IRS knows they're receiving it. But they know it's tax-free.

It's been that way for over 100 years. Now, they only pay tax on 80,000.

Not 200,000. I save them 40,000 of tax on the other

120,000. If the husband of the wife lives 25 years,

that right there save them a million dollars of unnecessary tax. And I don't

even to take into consideration the higher rates of return they achieve on

the laser fund. So, if you want to learn about what I call The Laser Fund, liquid

asset safely earning returns is an acronym. And why any place that you put

your retirement dollars I would suggest passes the laser test. Liquidity Safety

Predictable rates of return and tax-free. Not tax-deferred. This book is $20 retail.

I will buy the book. It's free to you you can claim one free copy of this book by

going to laserfund.com. L-A-S-E-R, fund, ".com". You pay $5.95 shipping and

handling. I'll pay for the book. There's options there to get the audio and some

additional video instruction if you would like. And this is designed to

empower you so that you can have a better retirement and not outlive your

money and stop thinking about "What can I do? I don't have a 401 K." Consider

yourself blessed.