How To Withdraw Money From 401(k) After Age 59 1/2 - YouTube

Get the money out of your 401(k)s strategically  in 5 years. In this episode, I'm going to address  

the question "How to withdraw money from 401(k)s  after age 59 and a half?" Now, get ready. It's  

going to be the opposite of what you've probably  heard to take out the minimum that you need.  

Nope. You want to get it out the tax is over and  done within 5 years if you can and reposition  

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

I'll explain why and the power behind this as  we continue in this episode. So, get ready.

So, my name is Doug Andrew and I've been a  financial strategist and a tax minimization  

specialist retirement planning specialist for  more than 4 and a half decades. And in doing that,  

I've helped many, many people free themselves  from what I call the tax-trap and they've sort  

of painted themselves into this corner with their  yet-to-be taxed IRAs and 401(k)s. You're going to  

see here something that I developed years ago that  I call a strategic rollout. It's not a rollover,  

it's a roll-out. You're getting the money out of  your IRA and 401(k). See a rollover as far as I'm  

concerned is going from the frying pan into  the fire. You're continuing to defer, delay,  

procrastinate, okay? Another word for defer is  put off or procrastinate. When has procrastinating  

anything turned out good for you? It hasn't  for me. You know, if I were a physician,  

I probably spent most of my career curing people's  financial dis-ease. See when we're not at ease  

physically at a cellular level, we call that  disease. Well, there's a lot of people that  

are not at ease financially. They have a tax  dis-ease when they go to retire. Because they  

find themselves in as high or higher bracket as  they've ever been in and they don't know what  

to do and they think they're saving tax by taking  out minimum distributions the rest of their life.  

No, no, no. You're going to see that actually  compounds the problem. So, I would rather prevent  

the tax disease but frankly, most people I  have had to cure the tax disease. And so,  

I'm going to show you how to do that and if  you're young enough how to prevent it altogether.  

So, there are many, many couples that have come  to me and whatever their retirement resources  

were, whether they had $500,000, a million, 4  million. One couple had 8 million. ofttimes, as  

they begin to withdraw money out of a qualified  plan like a 401(k) or their IRAs or pension  

or profit-sharing plans. They're all qualified  plans. Qualified with who? The government, okay?  

You got your tax break usually on the contribution  phase unless you opted to convert to a Roth  

and you've already taken care of the tax by doing  that. And so, many couples, if they had $200,000  

that was going to show up on their 1040 tax  return, by doing a strategic rollout over 5 years,  

I have successfully transferred 80 thousand, 100  thousand, even 120 thousand. 60% of their income  

from being taxed the rest of their life on the  front of their 1040 tax return. And they've gone  

down to only maybe 40% of that. 80,000 is taxed.  The other 120,000 is now tax-free. Now, the IRS  

knows they keep receiving that but they know it  is cut and dried. It's been tax-free as a sacred  

tax-free cash cow in the internal revenue code  for over 107 years. So, I'm going to share some  

stories with you. But remember, at the end of this  episode, I'm going to give you an opportunity to  

claim your free copy of my most recent bestselling  book The Laser Fund, over 300 pages of charts,  

graphs, and explanations. But also there are  12 chapters that have 62 actual client stories  

like the ones I'm going to share with you. But  let's talk about the strategy first of all. It's  

actually a 3-part strategy. A strategic rollout  is the term that I coined. It's not a rollover,  

it's a rollout. You're getting the money  out and the taxes over and done with usually  

strategically over a 5-year period maybe longer.  And so, most of the time, we've been able to get  

people's money trapped in IRAs and 401(k)s  repositioned out the tax is over and done  

with it today's lower rates. And then what do we  do with the after-tax money? See, a lot of CPAs,  

tax attorneys go, "Well why would you do that?  Now, where you're going to put the money?" I go,  

"Hello? You're going to reposition the after-tax  money into something that's going to be tax-free  

from now on." They go, "What's that?" So, I have  to teach them about the Laser Fund, okay? But see,  

what I like to do is reposition it into something  that's not only tax-free from now on. But what  

will ultimately blossom in value when you die  reimburse and you many fold for the taxes you  

paid. So, you're really not out anything or your  spouse or your children. They'll actually come  

out ahead versus leaving the money and IRAs  and 401(k)s the rest of your life and taking  

required minimum distributions which is the worst  advice I've ever heard. You're going to understand  

why when I tell you the stories. Now, the third  part of the strategy we don't use all the time.  

But it's to offset. Some or all of the tax  incurred during the rollout process by creating or  

resurrecting new tax deductions. Many, many  people have been killing their tax deductions  

because they were paying off their real estate  properties or their house. The children are gone.  

And later in life, if they're still living with  you, you can't deduct them anymore. People usually  

aren't contributing money to IRAs and 401(k)s in  retirement. If they're business owners, they don't  

have those deductions and congress keeps raising  taxes. And so, we have to resurrect tax deductions  

to help you eliminate the tax impact during the  rollout process. So, that's what is called a  

strategic rollout. You'll understand it better  next when I give you some actual stories and  

examples of how we've done this. So, in your free  copy of The Laser Fund book which is 300 pages,  

there's 12 chapters that contain 62 actual  chicken soup for the financial soul stories.  

One of those chapters is dedicated to this  strategy. And so, I'll give you a quick  

summary of some of the stories. I remember a  husband and wife, they were both school teachers  

and they came to me at age 60. So, they're  over age 59 and a half. They don't have a 10  

penalty if they start tapping into their 401(k)s,  their 403Bs and their tax-shielded annuities.  

Their tax advisor said, "Oh, do you need the  money?" They said, "No, we don't need the money.  

We're not going to really retire until we're age  70 and a half." Back then, you could put it off  

until age 70 and a half before you had to start  withdrawing money or else the irs penalizes you  

50% on what you should have pulled out. Now it's a  72. They want that money out in tax before you die  

so they can tax it again when you do die.  Now, most CPAs and tax attorneys, in fact,  

CNBC tells you "If you don't need the  money, continue to defer, defer, defer."  

That's like saying continue to procrastinate,  procrastinate, procrastinate. But see, I have  

a software program and in a nutshell, I showed  these 2 school teachers. Now, if you continue  

to earn let's say 7.2% rate of return, they had  250,000 in their accounts. That should double to  

500,000. And then if you started taking out RMDs,  required minimum distributions, this is how much  

tax you will pay by stringing it out during the  husband's life expectancy, then the wife's life  

expectancy because usually, the man dies first.  And then as you leave it behind to your children,  

their life expectancies, they were flabbergasted.  Even if congress never raised taxes,  

they were going to shell out more than a quarter  of a million in taxes. And that's how much they  

had. I said, "Yeah, you're just delaying the  inevitable. You're compounding the problem."  

I felt like Sam I Am in Green Eggs and Ham. I  said, "You will like this. You will see." -"No,  

no we don't want to pay the tax." You're going to  pay it sooner or later. Finally, I convinced them.  

I said, "If we get it out over 5 years and we  roll this out, you're going to pay about $12,500  

a year in tax or 60,000." Oh, we don't wan to pay  that. I said, "You're going to pay more than that.  

I just showed you." They go, "Okay." And so, I  said, "You ready to go?" And they said, "Well,  

is this what you would do?" And I said, "Well,  I would resurrect some deductions you've been  

killing on your rental properties. I would  refinance those and get some deductions going.  

It's a concept that I teach about being your own  banker." They did that and the tax liability went  

from 60,000 down to 20,000. They refinanced some  other properties and it went down to zero. In 5  

years, they were ready. Now, pay off all their  properties and I said, "You're earning twice as  

much as the net after-tax cost of the mortgage."  I wouldn't do that. You're making 32,000 a year  

and the mortgage is only costing you 16,000  and they go, "Oh, yeah. That would be stupid."  

But here's the deal: I saved them a quarter of a  million dollars of unnecessary tax that they were  

going to pay by stringing it out. Now, they got  that quarter of a million out over a 5-year period  

and they actually got out 360,000 tax-free. They  are experiencing double the net spendable income  

and it's tax-free because they use the laser  fund. Now folks, I have helped a gentleman who  

was widowed at age 70. And I was able to save him  3-quarters of a million dollars of unnecessary  

tax. At the time he came to us, he had 600,000.  And his advisor said, "Oh, just take out RMDs,  

4% rule." 4% on 600,000 was 24,000 a year. How  pathetic is that? And it was taxable. He was only  

netting 16,000. Long story short, in 5 years with  a strategic roll-out, he ended up getting 750,000  

because he was earning interest that he was able  to earn with us on his laser fund. He had 750,000  

tax-free. We got the money out without any tax  consequence. He's been earning 8% and some years,  

10%. Let's just take 8. What's 8% on 750,000 in  the laser fund? That is 60,000 a year. How much  

more is 60,000 than 16,000 which is what he was  getting net after-tax out of his IRAs? Folks,  

we 3 and a half times his cash flow by using  the strategic rollout strategy. Another couple,  

both husband and wife were physicians. They had  4.6 million saved. Their accountant said, "Oh,  

they're going to pay 2.6 million in tax over the  next few years on those. But they can afford it."  

I said, "Well, let's ask them." I said, I can't  save you all of that in tax, 2.6 million. But  

I could save you 1.2 million." They said, "Yeah,  let's do it." I was able to do a strategic rollout  

and save them 1.2 million of unnecessary tax. They  set up their family bank with that. 1.2 million  

is generating 100,000 a year of tax-free cash flow  for their children, grandchildren, into perpetuity  

for a college mission accounts, of military. It  doesn't matter what it is where they can empower  

their posterity instead of just sending the money  down the drain in unnecessary tax. We do this  

all the time. So, as I connect the dots here of  how to withdraw money out of tax-deferred accounts  

like 401(k)s or IRAs or 403Bs or 457s, they're  all qualified plans. Hopefully you're getting  

some insights that you want to strategically  roll the money out sooner than later and get  

the taxes over and done with it today's lower tax  rates rather than thinking taxes in the future  

will be lower. No. People find themselves  in as high or higher tax brackets especially  

during retirement if they've saved very much  money. Now, my favorite vehicle to reposition the  

after-tax money is in what I call the laser fund  and so I wrote a book with that title. The Laser  

Fund: How To Diversify and Create The Foundation  For a Tax-Free Retirement. And in this book,  

it's actually two books in one. This site is about  200 pages, 14 chapters with all kinds of charts  

and graphs and explanations. If you're more of a  right-brain learner, you turn the book over and  

read this one. This has 12 chapters with 62 actual  client stories. And you'll see examples of how  

people with money trapped in IRAs and 401(k)s  got their money out with the least tax impact  

and reposition it into a portfolio of laser  funds to accumulate their money tax-free  

under section 72(E) of the internal revenue  code the rest of their life. They were able  

to access income in retirement totally tax-free  under section 7702. And when they ultimately die  

anything that's left in there blossoms  in value and transfers income tax free  

under section 101 A. You will learn about  those 3 sections of the code in this book.  

So, to claim your free copy and understand this  and many other concepts on asset optimization,  

claim your book by going to laserfund.com.  LASERfund.com. And you contribute a nominal  

amount towards the shipping and handling  and I cover the rest of that cost.  

You have to have some skin in the game, if my  children wanted a copy, they would have to do  

that. And I'll pay for the book. I'll fire out a  hard copy to you. There's also options in there  

to get the audio version, digital version. If  you like to watch and learn listen and learn.  

I am really into empowering you so that you can  have a brighter future and not outlive your money.