Did you know there's only 3 ways to create tax-free money in retirement?
You could buy municipal bonds. No restrictions on how much you can buy. Muni bonds are generally safer than stocks but there is a risk of default when cities go insolvent and default on debt.
You could fund a Roth IRA (assuming your income isn't too high). According to the 2018 tax rules, you can invest up to $5,500 a year in a Roth IRA; if you are over age 50, you can put an additional $1,000 into a Roth IRA for a total of $6,500.
You can overfund a dividend paying Whole Life policy and borrow against the cash values. Taking loans is a non-taxable event and the death benefit eventually covers the loans. If you're familiar with Jim Harbaugh, former San Francisco 49ers coach now with the University of Michigan, tax-free loans from a policy on his life is part of his compensation plan. See the ESPN article below. Unlike a Roth IRA, Mr. Harbaugh doesn't have to wait until age 59.5 to start taking income and because the policy is a private contract (not a government qualified plan like 401k/IRAs), contributions to the plan can be substantially more than any 401k/IRA imposed limit. There is also no risk of market performance for Mr. Harbaugh because Whole Life policies have guaranteed cash values.
Here's the ESPN article:
To learn more about getting your own tax-free retirement plan set up, request an appointment using the calendar link here: http://www.vcita.com/v/john.montoya
