Roth IRA Or IUL aka The Rich Man's Roth | Which Is Better? - YouTube

The Rich Man's Roth has 300% more benefits. In  this episode, I'm going to address the question  

Roth IRA or IUL (the Rich  Man's Roth), which is better?

Hi, I'm Doug Andrew and I've helped people  optimize their financial assets for north of 4  

and a half decades and minimize taxes and prepare  for a comfortable retirement. My favorite vehicle  

by far for people to accumulate their money  tax-free and then be able to access their money  

tax-free all through their golden years and then  at the end of the day when they finally pass away,  

whatever they leave behind blossoms in value and  transfers income tax-free is what I call the Laser  

Fund. LASER is an acronym that stands for liquid  assets safely earning returns. And if you stay  

to the end of this episode, I want to gift you  a copy of my most recent best-selling 300-page  

book The LASER Fund. It retails for 20 but I'll  show you how you can claim your copy free. Now,  

when people ask me the question, "What's better?  A Roth IRA?" Because a lot of people they begin to  

watch my educational videos on this very channel.  And they begin to realize, "Wait, Mr. Andrew  

has never owned an IRA or 401(k)? And he says he  never will? Hmm..." Then they learn and they go,  

"Okay, he says a Roth is a step in the right  direction. But he's never owned a Roth IRA or  

401(k) and never will. Well, where does he put his  money?" In IUL. Indexed universal life insurance  

contracts which many savvy CAPs and tax attorneys  refer to as the Rich Man's Roth. And I snicker  

because you don't have to be rich to have one. I  mean you can set one up and talk away 500 bucks  

a month. But wealthy people, rich people if you  make too much money you cannot own a Roth. So,  

this is where they put their money. But it's also  very beneficial for people who would not consider  

themselves as rich. So, let me explain how these  all came about. And when historically Roths  

were first started. So, for years people were told  to put money into tax-deferred IRAs and 401(k)s  

and get a tax break on the contribution money and  let it accumulate tax-deferred and when you go to  

retire and you take out the money from the IRAs  of 401(k)s, you'll pay tax. But you'll likely be  

in a lower bracket then. Now, that was the  premise. That has not been true or axiomatic  

for more than 25 years. And it took the financial  services industry until just the last few years to  

finally admit. Yeah, that was probably the wrong  advice but they don't want to be responsible for  

you may be outliving your money due to taxes going  up. So, they sort of just back off and so still 91  

of Americans I think are duped into putting money  into traditional IRAs and 401(k)s. When a Roth, I  

can prove if taxes go up in the future which most  Americans believe they will, a Roth can generate  

25%, 33%, 50% more in net spendable income or it  can last much longer than the same amount of money  

at the same rate of return in a traditional IRA,  401(k) just because of taxes. If taxes go up, you  

want it to be tax-free not continue to pay tax at  higher and higher rates during your golden years.  

It's that simple. When did Roths come about?  Well, in 1997, the government was hard up  

for tax revenue. And so, senator Roth said,  "I have an idea and we'll name it after me".  

A lot of Americans are realizing it's far  better to pay tax on the contribution money.  

Take after-tax money and put it into a savings  account like an IRA or 401(k) and have it be  

tax-free as it grows. But when they take it out,  it's tax-free down the road when taxes are going  

to be higher. People are getting smart. So, he  says, "Let's offer a Roth, name it after me."  

And so, what did that do? It was more for  their benefit than your benefit. I'm not saying  

it wasn't a step in the right direction. But  if people convert from a traditional IRA,  

401(k) to a Roth, it triggers tax. You have to  pay the tax. And then it's tax-free thereafter.  

That created a huge windfall for the federal  government because a lot of people who were smart,  

they converted to Roths. And the government  got a whole bunch of tax revenue.  

They didn't have to wait till people retired to  start getting their tax revenue. Well, when they  

got hard up for money again, they introduced the  Roth 401(k). So, see, it was a step in the right  

direction. But Roths only have 2 benefits. So, oft  times, when people hear me on the radio... I've  

had a national radio show for 12 years and they  do double-takes. Why? Now, before I explain why,  

if this is intriguing you and you can think of  somebody who ought to hear this information,  

be sure and share, like, post a comment. But  subscribe to the 3-Dimensional Wealth channel and  

be sure and click that little bell so that you'll  be notified every time I post an in-depth answer  

that's going to educate you on opportunities that  maybe you didn't know existed before because I  

post them almost daily. So, when people hear me  on the radio, they say, "What? What did Doug say  

on the radio?" Well, recently, I've been saying,  "Now, may be the perfect time to get taxes over  

with on IRAs and 401(k)s. Because your current tax  bracket is likely the lowest bracket you will ever  

be in." And so, I will often talk about, "Hey,  if you stay until the end..." And I'm talking  

about the end of this episode. "...you're going  to understand how to save hundreds of thousands  

of dollars of unnecessary tax. How to not outlive  your money in retirement. How to not lose money  

when the economy and the markets whipsaw? Which  they will continue to do. And how to have 50 to  

100 percent more in net spendable income. Would  you like to learn these things?" Well, first  

of all, if you're feeling anxious like the Great  Recession... What's the Great Recession? The years  

2000 to 2010. I'm going to go to 2012. It's the  worst 12-year period since the Great Depression.  

See, a lot of people who have their money in  tax-deferred IRAs or 401(k)s in the market, we're  

going to start with November 8th of 1999. Let's  say they spent their entire life accumulating a  

million dollars in their tax-deferred IRAs  or 401(k)s in the market. They saw that  

million-dollar nest egg go down in value after  the terrorist attacks of 2001, okay? 9/11. For 3  

consecutive years, 35, 40, some people lost 50  percent. If you lose 40% which was the average,  

a 40% loss has to be followed by a 67% gain to  get back to break even right here. Break-even  

right here. If 100,000 goes down to 60,000, if a  million goes down to 600,000, six hundred thousand  

has to grow by 67% --400,000 to get back what you  lost. A 40% loss has to be followed by a 67% gain.  

It took 4 years to do that. People felt like they  lost their future. They had to put off retirement  

7 years. Very frustrated. Then what happened  in 2008? As Warren Buffett put it, he said,  

"When the tide went out..." In 2008, "...it  revealed who was swimming naked" is what he said.  

In other words, they weren't protected. They  didn't learn. And they lost 40% again for the  

second time in a decade. It took 4 years to come  back to break even. And finally, 12 years later,  

they had $1,046,800 to show for the million they  started with. How pathetic is that? It didn't even  

buy the same gallons of gas and loaves of bread  than a million did back here because of inflation.  

Now, what's the point? People using the Laser  Fund, when this market went down, down, down;  

they didn't lose. They may not have made much of  anything but their money stayed steady. As soon  

as the market turned around, they started making  money again. So, they're clear up here when most  

Americans are only here. When the market went down  again, they stayed up here. They didn't make much  

of anything but then they started making money  again and I'm going to show you the difference  

with people who have their money linked to the  market but not in the market. This is called  

indexing. And it's a feature that only exists  with the max-funded insurance contracts in the  

way that I'm talking about right now. So, what it  means is if we took this 10-year period because  

a lot of people weren't even back to break even  at the end of 2010. People using the Laser Fund,  

they made money but when the market went down,  even if they earned zip, they didn't lose.  

They started making money again. And when  the market dived again, they held steady and  

then they started making money again. Even when  people only had 68,000 to show for their 100,000  

people here had 178,000. And then I showed you in  the previous chart 2 years later. Many people had  

2.5 to 3 times the money when most Americans this  red line was barely, barely back up here again.  

Is this arousing curiosity? Watch. So, my  recommendation to people who have their life  

savings in yet-to-be-taxed IRAs and 401(k)s  in the market, get it out of the market.  

Strategically roll the money out. This isn't a  rollover. So, what is this? See a rollover is like  

going from the frying pan into the fire as far as  I'm concerned. You're taking money in 401(k)s and  

rolling it over to IRAs continuing to delay the  inevitable, procrastinate, paying tax, and then  

being duped into at age 72 taking RMDs, required  minimum distributions thinking you're saving tax.  

Worst advice I've ever heard. I show people the  darkness of the night if they keep doing that  

and how they're going to outlive their money and  pay taxes forever through their lifetime their  

spouse's lifetime and even their children who  inherit those. Instead of doing that, I'd like  

to show them the brightness of the day or their  future if they will get the money out. Now, people  

will say, "What about a Roth? You mean convert to  a Roth?" I go, "Well a Roth is a step in the right  

direction. But Roths only have 2 benefits." What  are they? You fund a roth with after-tax dollars  

but your money accumulates tax-free in a Roth and  you can access it tax-free. The Laser Fund has  

those 2 benefits and has had those 2 benefits for  over a century-long before Roths were introduced  

in 1997. But the Laser Fund has 4 additional  benefits, 3times the benefits, okay? 6 instead of  

2 that Roths have. What are they? In a nutshell,  with your contributions to the Laser Fund,  

you can deposit larger sums than you can to a  Roth. With a Roth, you're limited to a certain  

percent of your income or a certain dollar amount  each year. In fact, if you make too much money  

you can't even participate in a Roth. That's why  savvy CPAs and tax attorneys call the Laser Fund  

the Rich Man's Roth. You don't have to be rich to  have one. But rich people can't own a Roth. So,  

if you were a business owner and you had a banner  a year, you could put in $300,000, you don't have  

to. You could put in 30,000. If you put in just  30,000 but you could have put in 300,000, can you  

make up the other 270,000? Sure, anytime. Anytime  down the road. With the Roth, you can't do that.  

If you don't use the room in a given tax year, you  lose it. If you don't use it, you lose it. See,  

Roths have strings attached. But here's a big  difference. If you need to access money for  

any reason, you can. There are no IRS penalties  attached when you take money out of a Laser Fund.  

For example, let's say, I put in $300,000 during  a banner year and then all of a sudden 30 days  

later, I have a wonderful investment opportunity  or I can merge with my partner in business  

and I need 250,000. I can access that out of my  laser fund. There's no 10% penalty. It doesn't  

trigger tax. You can't do that with a Roth. You  have to wait 5 years or until you're 59 and a  

half. Those are the strings attached. Now, using  indexing, indexing allows you to do what I showed  

you. Not lose when the markets go down because  your money's not in the market. Your money is  

linked to the market. You may not make anything  but you don't lose. And when the markets go up,  

you get to participate. And this is what  has allowed many people to double or triple  

the amount they earn over a 12-year period instead  of just barely getting back what you lost twice  

in that decade. So, you can use indexing. But the  last benefit, when you ultimately die, the account  

increases in value and transfers totally income  tax-free. I'm 68 and a half. If I died tomorrow in  

an accident every million that I would have in my  portfolio of laser funds would blossom right now  

to about 2 and a half million and transfer totally  income tax free to my wife, to my children,  

grandkids, a church, a charity. There's not a Roth  around that will do that. And people say, "Well,  

how much does that cost?" Well, nothing's free  but it doesn't cost me anything. It's being paid  

for with a minuscule portion of interest that  would otherwise go out the window in unnecessary  

income tax. So, are you interested? I would  strongly recommend you look into reading  

and studying your own copy of The LASER Fund. So,  let me show you how you can claim your free copy.  

This is my 11th book. And it's been  flying off of the warehouse shelves.  

You can pay 20% for it on Amazon. But don't tell  them. I want to gift you a free copy. This is  

how you claim your free copy of this 300-page  book. You can go to laserfund... LASERfund.com  

but just click on the link below. Go in there  and you contribute a nominal amount towards the  

shipping and handling. I always require people  have a little bit of skin in the game so that  

they will take it serious and read it. If you do  that, I'll buy the book. I'll gift it to you. This  

side has 200 pages, 14 chapters with all kinds of  charts and graphs so that you'll understand how it  

works and why it's been a sacred tax-free cash cow  in the internal revenue code for over 100 years.  

But if you want to read stories of how it actually  works in real life, actual historical example;  

you flip the book over. And you read this side,  12 chapters, 100 pages with 62 actual client  

stories of how the Laser Fund is the most powerful  tool that knocks the socks off of any IRA, 401(k)  

and any Roth IRA or 401(k) because  it has 6 benefits instead of just 2.