Thank You!!

 

 

We truly appreciate the commitment you’ve made to your financial future; taking this step to educate yourself is a significant milestone that most people never reach.

Below is the link to download the Free eBook, “Understanding Annuities”.

To make the most of this momentum, read through the guide to understand your options, and then reach out to me so we can discuss how these strategies apply to your specific goals.

 

 

 

 

 

 

I look forward to helping you turn this information

into a solid plan for your retirement.

 

 

 

 

 

How U.S. Tariffs Backfire: Inflation, Stagflation, and the Hidden Tax on Small Businesses

 

 

 

 

What Are Tariffs? A Tax on American Consumers

The Merriam-Webster Dictionary defines a tariff as “a schedule of duties imposed by a government on imported or in some countries, exported goods.” In simpler terms, tariffs are taxes levied on foreign products entering the U.S.

But here’s the critical detail: American businesses and consumers—not foreign exporters—pay these taxes.

*When the U.S. imposes a 25% tariff on Chinese steel, American manufacturers absorb the cost, increasing prices for cars, appliances, and construction materials.

*Farmers, who rely heavily on exports, suffer when retaliatory tariffs reduce global demand for crops like soybeans, wheat, and corn.

 

Who Really Bears the Burden?

*  Small businesses (especially import-dependent ones) see shrinking profit margins.

*  Consumers pay inflated prices—directly fueling inflation.

*  Banks face rising defaults as struggling businesses fail to repay loans.

 

Why Tariffs Against Allies Are a Dangerous Gamble

Tariffs are often used to punish economic adversaries like China. But imposing them on allies—Canada, the EU, Japan, and the UK—creates unnecessary economic warfare.

 

The Problem with Targeting Allies:

1.  They Have Alternatives – Unlike adversarial nations, allies can shift trade to other partners, leaving U.S. exporters stranded.

2.  They Retaliate Strategically – Instead of broad tariffs, allies target politically sensitive industries (e.g., EU tariffs on Kentucky bourbon, and Canada’s energy tariffs).

3.  They Hold U.S. Debt –  Foreign allies own 30% of U.S. Treasuries. If they dump debt, interest rates spike, hurting American borrowers.

Bottom Line: Tariffs on allies don’t protect the U.S.—they isolate it.

 

How Allies Are Fighting Back (And Who Pays the Price)

 

1. Retaliatory Tariffs: Precision Strikes on U.S. Exports

*  EU’s Revenge: After U.S. steel tariffs, the EU slapped 25% duties on American whiskey, jeans, and motorcycles—hitting small businesses hardest.

*  Canada’s Countermove: A 20% tariff on U.S. energy exports raised costs for New York manufacturers relying on Niagara Falls power.

*  China’s Agricultural Ban: Soybean exports to China dropped 90%, costing U.S. farmers $8 billion in lost sales.

 

2. Financial Retaliation: Dumping U.S. Debt

16 G20 nations—including Japan, the UK, and Switzerland—are reducing Treasury holdings.

 Why? Tariffs shrink their trade surpluses, leaving fewer dollars to reinvest in U.S. debt.

Impact:

*  Higher interest rates (mortgages, car loans, business credit get pricier).

*  The Fed loses control—forced to print money or hike rates, both of which backfire.

Who Suffers?

*  Small businesses (loan approvals drop).

*  Homebuyers (rising mortgage rates).

*  Taxpayers (higher debt costs strain the federal budget).

 

The Fed’s Nightmare: Jerome Powell’s No-Win Scenario

As allies retreat from U.S. debt, Federal Reserve Chair Jerome Powell faces an impossible choice:

 

Option 1: Print Money to Buy Unsold Treasuries

*  Result: Inflation spirals (like the 1970s oil crisis).

*  Risk: The dollar weakens, imports get even costlier, and small businesses face hyper-priced supplies.

Option 2: Raise Interest Rates to Attract Buyers

*  Result: Loans become unaffordable, businesses freeze hiring, and unemployment rises.

*  Risk: A recession begins, but inflation doesn’t stop (stagflation).

Powell’s Dilemma:
“Do I let inflation rage or trigger a job crisis? Tariffs made both outcomes worse.”

 

Stagflation: The Ultimate Economic Trap

Stagflation occurs when an economy suffers:

*  High inflation (rising prices)

*  High unemployment (falling jobs)

*  Stagnant growth (flat or shrinking GDP)

 

How Tariffs Cause Stagflation:

1.  Cost-Push Inflation – Tariffs raise import prices (materials, equipment, consumer goods).

2.  Demand Destruction – Rising rates kill consumer spending.

3.  Export Collapse – Retaliatory tariffs shrink foreign sales.

Historical Example: The 1970s oil embargo triggered stagflation—but today’s tariffs are self-inflicted.

 

Small Business Survival: Why Valuation Matters Now

Small Business Armor: 18 KPIs to Monitor as Economic Storms Approach

In this climate of tariffs, inflation, and financial instability, simply knowing your valuation isn’t enough – you need to track the right performance indicators that serve as early warning systems. Through our BizEquity-powered analysis, we monitor 18 critical KPIs, but these 6 are essential:

 

1.  Liquidity Armor (Cash Flow KPIs)

*  Operating Cash Flow Ratio: Measures the ability to cover sudden cost increases from tariffs

*  Working Capital Turnover: Reveals how efficiently you’re using scarce capital

*  Quick Ratio: Tests the ability to survive 30-60 days if credit lines freeze

 

2.  Supply Chain Vulnerability 

*  IndicatorsImport Cost as % of COGS: Quantifies your tariff exposure

*  Inventory Turnover Rate: Warns of slowing demand before revenue drops appear

*  Supplier Concentration Score: Identifies overdependence on tariff-impacted partners

 

3.  Credit Crisis Preparedness

*  Debt Service Coverage Ratio: Measures the ability to handle rate hikes

*  Current Ratio: Shows liquidity to withstand bank tightening

*  Credit Utilization %: Warns before hitting borrowing limits

 

4.  Operational Shock Absorbers

*  Break-Even Point: How much sales can drop before danger

*  Employee Productivity Ratio: Staff efficiency as costs rise

 

Why This Matters Now
When we ran these KPIs for a Midwest manufacturer last month, we found:

*  Their 68% import dependency made them critically vulnerable

*  A debt service ratio of 1.1 meant even small rate hikes would cripple them

*  $287k in untapped equipment equity became their lifeline

 

Immediate Action Items:

1.  Get your free BizEquity snapshot showing which of these 18 KPIs are in your danger zone

2.  We’ll benchmark you against peers in your industry

3.  Build your 90-day contingency plan around your weakest metrics

 

Free Small Business Valuation:

Protect Your Business Before It’s Too Late

 

Smart owners don’t wait for collapse—they prepare.
Right now, I’m offering a complimentary business valuation review where we’ll:
✅ Calculate your crisis-proof value
✅ Identify hidden financial risks
✅ Build your survival plan

This isn’t just a number—it’s your lifeline.
Book Your Free Session Now before the next economic shock hits.

 

 

 

 

 

 

 

How 1099 Employees Can Slash Taxes and Build Wealth with Indexed Wealth Strategies

 

 

 

 

Are you a Traveling Nurse, Independent Contractor, or Freelancer struggling with high self-employment taxes, irregular income, and a lack of employer-sponsored benefits? You’re not alone. Millions of 1099 employees face these challenges every day. But what if there was a way to reduce your tax burden, protect your income, and build wealth—all while avoiding the risks of the stock market?

Enter Indexed Wealth Strategies, a powerful financial tool designed specifically for 1099 employees. Combined with an S-Corp tax structure, this strategy can help you slash taxes, secure your financial future, and achieve the peace of mind you deserve. Let’s dive into how it works and why it’s a game-changer for freelancers and independent contractors.

 

What Are Indexed Wealth Strategies?

Indexed Wealth Strategies are financial plans that allow you to grow your wealth through market-linked growth while protecting your principal with a 0% floor. Unlike traditional investments like 401(k)s or IRAs, these strategies offer tax-free growth, tax-free withdrawals, and tax-free loans.

For 1099 employees, this means you can:

*  Earn high returns without worrying about market downturns.

*  Access your money penalty-free for emergencies or opportunities.

*  Reduce your self-employment taxes by pairing this strategy with an S-Corp tax structure.

 

The Challenges 1099 Employees Face

 

1. High Self-Employment Taxes

As a 1099 employee, you’re responsible for both the employer and employee portions of Social Security and Medicare taxes—a whopping 15.3% tax rate. This can eat into your income and make it harder to save for retirement.

Solution: By switching to an S-Corp tax structure, you can reduce your self-employment taxes significantly. Pair this with Indexed Wealth Strategies, and you’ll have a powerful combination for tax savings and wealth growth.

 

2. Irregular Income

Freelancers and gig workers often face irregular income, making it difficult to budget, save, or plan for the future.

Solution: Indexed Wealth Strategies allow you to grow your wealth steadily, regardless of market conditions. With a 0% floor, you’ll never lose money—even during economic downturns.

 

3. Lack of Employer-Sponsored Benefits

Unlike traditional employees, 1099 workers cannot access employer-sponsored benefits like 401(k)s, health insurance, or paid time off.

Solution: Indexed Wealth Strategies are a personal retirement plan, offering tax-free growth and flexible withdrawals. You can also borrow against your policy for emergencies or opportunities, giving you the financial security you need.

 

How Indexed Wealth Strategies Work

 

1. Market-Linked Growth with a 0% Floor

Indexed Wealth Strategies are tied to a market index (like the S&P 500), allowing you to earn high returns when the market performs well. However, if the market drops, your principal is protected by a 0% floor. This means you’ll never lose money—even in a recession.

 

2. Tax-Free Growth, Withdrawals, and Loans

One of the biggest advantages of Indexed Wealth Strategies is their tax efficiency. Your money grows tax-free, and you can withdraw or borrow against it without paying taxes or penalties. This is a huge benefit for 1099 employees looking to maximize their earnings.

 

3. Flexibility and Accessibility

Indexed Wealth Strategies don’t have age restrictions or penalties for early withdrawals, unlike traditional retirement plans. This makes them ideal for 1099 employees who need may access to their money at any time.

 

Pairing Indexed Wealth Strategies with an S-Corp Tax Structure

 

If you’re a 1099 employee, switching to an S-Corp tax structure can help you save thousands of dollars in self-employment taxes. Here’s how it works:

*  Pay Yourself a Reasonable Salary: As an S-Corp owner, you’ll pay yourself a salary and only pay payroll taxes on that amount.

*  Distribute Remaining Income as Dividends: The rest of your income can be distributed as dividends, which are not subject to self-employment taxes.

When you combine this strategy with Indexed Wealth Strategies, you’ll not only reduce your taxes but also grow your wealth faster and more securely. [Be sure to always be sure to consult with your tax advisor.]

 

Why 1099 Employees Love Indexed Wealth Strategies

 

*  No Market Risk: The 0% floor ensures your principal is always protected.

*  Tax Advantages: Enjoy tax-free growth, tax-free withdrawals, and tax-free loans.

*  Flexibility: Access your money whenever you need it, without penalties or restrictions.

*  Wealth Building: Grow your wealth steadily, even with irregular income.

 

FAQs About Indexed Wealth Strategies for 1099 Employees

 

1. What is a 0% floor?

A 0% floor is a feature of Indexed Wealth Strategies that ensures you’ll never lose money, even if the market performs poorly.

2. How can an S-Corp tax structure reduce my taxes?

By paying yourself a salary and distributing the rest of your income as dividends, you can significantly reduce your self-employment taxes.

3. Are Indexed Wealth Strategies Safe?

Yes! With a 0% floor, your principal is protected from market downturns, making it one of the safest ways to grow your wealth.

4. Can I access my money at any time?

Absolutely. Unlike traditional retirement plans, Indexed Wealth Strategies allow you to withdraw or borrow against your money without penalties.

 

Ready to Slash Taxes and Build Wealth?

Take control of your finances! 1099 employees, Indexed Wealth Strategies can slash taxes, protect income, and grow wealth. Combined with an S-Corp tax structure, this powerful financial tool can help you reduce your taxes, protect your income, and build wealth for the future.

Schedule a free consultation today to learn how you can take control of your financial future with Indexed Wealth Strategies.

 

 

 

 

 

JONATHAN KUMINGA & THE GOLDEN STATE WARRIORS’ SUCCESSION PLAN

 

 

 

 

In Sports, you very seldom see a good succession plan. Most times, the transition of the new superstar is when the other superstars have left or retired, leaving the team to struggle for a few years. But as players age, so too, does management.

The Golden State Warriors, with the development and inception of Jonathan Kuminga, is an example of what a good succession plan looks like.

For full disclosure The Golden State Warriors are my favorite basketball team, they’ve been that since Steph Curry’s been a member. And Jonathan Kuminga is my second favorite player, and on January 2nd Golden State defeated the Orlando Magic 121-115.

During this game, I began to see many parallels between Steve Kerr’s leadership of the team and a small business with a succession plan. Steve Kerr has a reputation for not playing his young players much but circumstances forced him to lean on Kuminga for good defense and minutes and Jonathan Kuminga responded with 34 minutes of play, he scored 19 points and 6 rebounds; showing that the young members of the organization will learn and become valuable assets to the organization.

Giving young players or lower management employees the opportunity and trust to step out and prove themselves is valuable to organizational continuity. This experience allows them to make mistakes and have them monitored by top management. Failures are the best teaching tool to lead them to top management.

Despite how many mistakes Kuminga will make, and he will make plenty, they can be monitored and corrected on the court in real time. 

Small business owners will face the inevitable task of developing a continuity plan to sell their businesses. To be able to sell your business at a marketable level and you want to have full confidence in selling your business, you have to also consider your employees. Your employees whom you’ve trained and prepared for this transition could also be your future buyers.

Selling your business to your employees provides an assurance of a smooth transition as well as getting an equitable price for your business. Why is this important? Because only 20% of all the business listings for sale in a given year are sold. If owner financing is applied the owner may still have a small stake in the business and the gradual transition is good for both parties. It allows you to be out of the business and have more leisure time and also still retain partial ownership and become a mentor to the new owner for a set period. 

Jonathan Kuminga is growing within a system where the Superstars like Steph Curry, Klay Thompson, and Draymond Green can mentor him as well as transition to their new roles within the organization, and it too would like to continue the growth of the Golden State Warriors. All sports teams never have that type of transitional success. The only other transitional success I can think of is in 2008 when Aaron Rogers became the starting quarterback for The Green Bay Packers after sitting on the bench under Brent Farve for 3 years.

Sports teams often prioritize short-term success over long-term planning. This can lead to a lack of foresight in developing succession plans for key players and coaches, resulting in abrupt transitions that disrupt team dynamics and performance.

Aging athletes and retirement are inevitable realities. However, many teams fail to adequately plan for these transitions, resulting in sudden departures of star players without suitable replacements or succession strategies in place.

Building a successful sports team requires a continuous cycle of talent recruitment and development. However, some teams struggle to identify and nurture promising young talent, leading to gaps in the roster when key players retire or leave the team.

What has been an enormous benefit to the Golden State Warriors is the fact that the owners do not have much of a high level of greed to hoard the money for themselves. Golden State has the highest salary payout than any other pro basketball team and yet they are still willing to pay to keep players for the longevity and continued success of the team. When his time does come I’m sure the Warriors will make good on paying Jonathan Kuminga. 

Organizational culture and leadership play significant roles in shaping a team’s approach to a business continuity plan. Teams with strong leadership and a culture of stability are more likely to implement effective succession strategies and navigate transitions successfully.

Like a Small business, which an NBA team is, investing in youth like Jonathan Kuminga’s significant playing time and a starting role alongside veteran stars like Steph Curry, the Warriors are investing in the future of their team. This approach allows Kuminga to gain valuable experience and confidence while learning from experienced teammates.

Balancing Youth and Experience

Kuminga’s presence in the starting lineup demonstrates the Warriors’ commitment to balancing youth and experience on their roster. By pairing young, dynamic players with seasoned veterans, the team maximizes its competitiveness in the present while also preparing for the future.

Seamless Transition

Kuminga’s emergence as a starter reflects a seamless transition within the Warriors’ roster. Instead of relying solely on established stars, the team integrates young talent into key roles, ensuring a smooth succession process and maintaining competitiveness over the long term.

Flexibility and Adaptability

The Warriors’ willingness to adapt their lineup and rotation to incorporate young talent like Kuminga demonstrates their flexibility as an organization. By embracing change and innovation, the team stays ahead of the curve and remains competitive in a constantly evolving league.

Small businesses can follow a similar strategy to sports teams by hiring young talent and grooming them for ownership through a strategic succession planning approach. 

 

Here are 7 ways in which you can achieve that

Identify Potential

Small businesses should identify young employees who show promise, ambition, and a strong work ethic. Look for individuals who demonstrate leadership qualities, innovation, and a passion for the company’s mission and values.

Invest in Development

Once promising young talent is identified, invest in their development through training, mentorship, and professional growth opportunities. Provide them with exposure to different aspects of the business and opportunities to take on increasing levels of responsibility.

Set Clear Goals

Establish clear goals and expectations for young employees, outlining the skills, knowledge, and experience they need to develop and advance within the company. Provide regular feedback and support to help them progress towards these goals.

Foster Leadership Skills

Encourage young employees to take on leadership roles and initiatives within the organization. Provide opportunities for them to lead projects, collaborate with cross-functional teams, and make strategic decisions that impact the business.

Create Ownership Opportunities

Small businesses can create ownership opportunities for young employees through profit-sharing arrangements, equity participation programs, or succession planning initiatives which come in the form of a Supplemental Employee  Retirement Plan{SERP}. Offer incentives that align with long-term goals and reward contributions to the company’s growth and success.

Mentorship and Support

Pair young employees with experienced mentors within the organization who can provide guidance, advice, and support as they navigate their career paths. Mentorship relationships can help young employees develop key skills, expand their networks, and gain valuable insights into the business.

Encourage Innovation

Foster a culture of innovation and entrepreneurship within the organization, where young employees are encouraged to think creatively, take calculated risks, and explore new ideas. Create an environment where innovation is valued and rewarded, and where young employees feel empowered to contribute their unique perspectives and insights.

By following these strategies, small business owners can guarantee themselves a future buyer of the business, solidify their retirement needs, and effectively groom young talent for ownership and leadership roles, ensuring a smooth transition and continuity of success for the company in the long term.

The value of a SERP-Supplemental Employee Retirement Plan is that it is a non-governmental regulated plan within the business. The flexibility that the employee can use these funds, after a company policy vesting period, as a down payment for the purchase of the business.

A solid succession plan can reduce taxes, and ensure the transition of the business. Staying relevant within the community may also be part of the legacy of your business.

Developing key people to succeed in the business, carrying the commitment to community and the commitment of the business culture that has been created will be guaranteed in a type of succession that transitions ownership from within.

This is just one of the strategies for a succession plan and help lead you to a fruitful retirement.

Set up a time to see what a succession plan looks like for you.

TURN YOUR OVERFUNDED 401(k) CONTRIBUTION INTO YOUR OWN EXECUTIVE BONUS PLAN

 

   

What happens if You Overfund your 401 (k)?

Many people have a clear goal to max out their 401(k) each year. The combined amount contributed by an employer and employee is $66,000 for 2023. The maximum amount for you to contribute to your 401 (k) is $22,500. For individuals over 50, you are allowed an additional $7,500 to add to your retirement plan in the form of catch-up contributions.

A 401k is considered a good retirement vehicle for most. You are allowed to put away comparable sums of pretax dollars, along with employer contributions, to help supplement your retirement, and you can grow these funds in a system of tax deference. The major problem with 401k’s is that they have such a high tax implication when you start using the funds at retirement.  The new tax implication for qualified retirement plans is  IRMAA (income-related monthly adjustment amount).  But that is a discussion for another blog coming soon!  You also have penalties and restrictions if you decide to use the funds before 59 ½.  Additionally, you are limited on the amount of pre-tax dollars you can contribute annually.

A common problem with 401k contributions is the limitation on how much you can contribute. Overfunding a 401k can lead to complicated tax issues. By the end of the calendar year, if you have overfunded your 401k these funds have to amend your w2.  The tax ramifications for leaving your overfunded monies in your 401k will result in a 6% tax for every year those funds sit in your qualified plan.

Not only are the excess funds to be amended on your w2 and considered as payment to you in the funded tax year, but so too are all of the earnings that were made from those contributions. Under the Internal Revenue Code, 402(g), any deferrals excluded from taxable income in any given year, such as 401k, 403b Salary Reduction Simplified Employee Pension Plans, and Savings Incentive Match Plans for Employees, may result in income tax liability to the participant unless corrected.

Most employers are pretty successful at getting these monies back to you before the end of the calendar year, but they do have till April 15^th. If they are delayed in sending your excess contributions are delayed in the next year, then they will have to file an amendment to your W9. If the excess amount is not returned to you by April 15, you could pay taxes on the amount twice—in the year the excess occurred, and in the year it is returned to you. As quoted by IRC 402(g), “This April 15 deadline is not postponed by extending the filing of the employee’s federal income tax return”.

To help yourself and save you some level of stress, it would be most prudent to follow up with your human resources department every year around October 15^th. This is normally the time of year that human resources files its annual 5500 report, which is a report of 401k contributions. It also gives you and human resources plenty of time to make sure that you comply with the tax rules regarding 401 (k) contributions within that year.

Regardless of what you decide to do with these funds, you are going to have to forego taxes.  If I could explain it to you this way, for example, if your excessive contributions come to $10,000, based on your tax bracket, you will have to pay taxes on that $10,000. Let’s assume your tax bracket is 34%, meaning you would have to pay $3,400 in taxes on the money as income since it is coming to you as a current payment, and you will have $6,600 in actual cash. This $6,600 would be used as your annual payment to your Indexed Universal Life policy, thus creating a tax-deferred, non-qualified, self-directed retirement plan.

Developing this planned allocation of funds is not established by the company, nor is it funded by the company. This non-qualified retirement plan design is not subject to the Employee Retirement Income Security Act of 1974 (ERISA). Most nonqualified plans are deferred compensation arrangements, or an agreement by an employer to pay an employee in the future. The term “nonqualified” means that the monies do not fall under (ERISA) guidelines.  What are the regulated tax guidelines for all retirement plans? These funds do not afford themselves the complication of being invested with pretax dollars and then taxed at some point and time in the future or when you have taken a distribution. These are monies that you have set aside and have designated as your retirement.

The difference between a non-qualified plan and a qualified plan is the restrictive guidelines of the government and abiding by the tax guidelines of the Internal Revenue Code. An Executive 162 Bonus Plan is a non-qualified plan designed for retirement.  And yes, I understand we are not creating a 162 Bonus Plan, but the concept is the same.

 

Tax Treatment of a 162 Executive Bonus Plan

Any bonus paid is considered taxable compensation; the employer can deduct the bonus payments because they are deemed compensation to the executive that he or she, in turn, must recognize for tax purposes in the year in which the bonus (or premium) is paid. This is what we are doing by developing this designed plan. We are taking the excess funds that are returned to you from your overfunded 401k, after taxes, which makes this a “Tax Sheltered Money Management System”, and are now available to place in an Indexed Universal Life Policy.

One of the main philosophies of retirement planning that I often convey to others is the idea of ‘the seed versus the harvest’. This basic farming analogy should give you a clear perspective on the benefits of having a tax-sheltered investment that can prove to be far more beneficial than your existing 401K. With the funding of an Indexed Universal Life Insurance policy, you are taking post-tax dollars and placing them into a tax-deferred system, and allowing the funds to grow exponentially. When the time comes to start taking distributions, you can do so by borrowing the funds, and you don’t pay taxes on borrowed money.

So, here are some of the advantages of an Indexed Universal Life policy versus your 401k:

•  It provides a much higher death benefit.

•  It has protection against market volatility and losses.

• Marketable gains are tax-deferred or often tax-sheltered

• It can provide a tax-free distribution of funds at retirement.

• Not restricted or penalized as to when you can take a distribution

Over the years, insurance products have become more flexible and diverse in their fund allocation selections. No longer are the days when you plop money down and get a small return of 2-4%. Now, some insurance products have performance values that can earn up to 15% and higher. The main type of insurance policy that does this is an Indexed Universal Life Insurance policy. Not only will you grow your policy at a competitive rate of return, but you will also benefit from the policy having an investment floor of zero, meaning that the crediting strategy that you choose to allocate your money will not lose money in a market downturn. Allowing you to apply for these overfunded monies without incurring any losses.

Also, clear your mind of all the boring misconceptions about buying a life insurance policy that will only pay out at the time of your death. Life insurance is a valuable tool that is used for the system, which I call the “Tax Sheltered Money Management System”.  The value is how an indexed Universal life policy can continuously grow for you without losses. Each policy has an annual zero-sum game-type philosophy to it. This means that on the anniversary date of your policy, your allocation structure starts anew. So, if you had a gain of 11% last year, those earnings are locked in and cannot be affected by the new year. The new year starts at zero on the day of the new anniversary date. 

Now I do understand that this is far from a 162 Executive Bonus Plan, and you should too, but the concept and execution are the same. The fact that you do not have to have a contractual agreement between you and your employer on vesting or employment timetables. But you can, again, take those tax dollars and place them in a “Tax Sheltered Money Management System” that will continue to grow for some time. One caveat: the system doesn’t work well unless you can fund it for at least 10 years.

Although the policy may impose charges—surrender charges or market value adjustments, for example—there is no IRS penalty for taking a loan from the policy or making a cash-value withdrawal (provided the policy is not a modified endowment contract). You can access these funds at any time that you feel you may need them.

Special Note: The method used to avoid taxes from earnings growth from an Indexed Universal Life policy is by borrowing the funds. You can borrow the funds and continue to grow your policy at competitive rates that are comparable to mutual funds. These borrowed funds will not be considered as a distribution, which is a taxable event. But if the policy is surrendered or lapses, then all funds that were borrowed will have a tax status change as a distribution, which will become a taxable event. But why would you cancel the policy for as long as the policy has $1 in cash value in it at death, it will pay out the death benefit, and no taxes will be incurred. And your family will also inherit the death benefit.

 

 

These are some of the things we do at Ron at Forester Financial Partners: developing designed plans to help you grow into your ideal wealth design with little risk, small time management, and less stress.