INCREASING RETIREMENT INCOME
Reduce the impact of income taxes and avoid contribution limits.
Click here to run your own personalized scenario comparing a taxable account to the Private Retirement Plan
For more than four decades, JR KATZ has advised clients in the areas of wealth accumulation, wealth transfer and risk management and currently manages more than $5B in life insurance portfolios
The Problem
Tax-free compounding is fundamental to maximizing retirement wealth. Unfortunately, traditional retirement accounts, such as 401(k)s and Roth IRAs, have significant contribution limits.
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401(k) annual contributions are limited to $19.5k
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Roth IRA annual contributions are limited to $6k
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Couples earning more than $208k may not contribute to a Roth IRA
The Solution
The Private Retirement Plan is a non-taxable structure, leveraging life insurance to produce significantly more retirement wealth as compared to a taxable account.
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Values accumulate without being taxed
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Investment allocation can be customized
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Appreciated assets can be reallocated without tax
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Funds can be withdrawn without a taxable event
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Accumulated value is income tax-free upon death
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Can be structured to avoid estate taxes
How does the Private Retirement Plan compare to a Taxable Account?
The PRP Income Calculation
The case study example (see chart) details the PRP income advantage vs. a taxable account. Based on specific assumptions, we determine the maximum amount of annual retirement income from the PRP. We then calculate the number of years that the same amount of income can be withdrawn from the taxable account.
Death is assumed in the last year that PRP income is received.
SCENARIO ASSUMPTIONS
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Male, Age 45
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Annual Funding: $30,000 to Age 65
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Years of Funding: 20
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Age to Begin Retirement Income: 72
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Annual Retirement Income: $220,000
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Net Rate of Investment Return: 7%
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Effective Tax Rate on Growth in Taxable Account: See Chart
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Effective Tax Rate on Withdrawals in Taxable Account : See Chart
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Residual Death Benefit @ Age 92
