Talk of the Town A spotlight on friendly neighborhood businesses

ADVERT I SEMENT PA ID FOR BY JDS wEAlTh MANAgEMENT cORP.

One of the biggest concerns we continually hear from the

folks we meet is, “what impact are ever increasing taxes going to have on our retirement planning”? That’s assuming taxes will continue to go up of course. with $16.5 TRIllION in national debt (and rising), underfunded liabilities such as Medicare, Medicaid, and Social Security totaling over $100 Trillion, and the full implementation of the Patient Protection and Affordable care Act in 2014, I would guess taxes will have to go up a lot!

what are folks to do? Remember, in most cases, if you defer a tax (IRA’S, 401k’s, etc.) you also defer the “tax calculation”. If you knew taxes would be higher in the future (or felt very strongly they would), why defer the tax? That’s like asking a farmer, “would you rather pay taxes on the seed or the harvest”? In most cases, paying later means paying more.

So, what’s the answer? here are two strategies that will provide “tax free income” in retirement. Note: These strategies are probably better suited for younger folks that are still working and have 15 – 20+ yrs. to build a retirement account.

1) Roth IRA’S — A Roth IRA is funded with “after tax” dollars. Investment options are numerous with a Roth. Some companies even offer Roth 401k’s (that’s fantastic because contribution limits can be higher, and company matches can be provided). The most you can contribute to a traditional Roth this year is $5,500 (like a traditional IRA). If you are 50 or over, you can contribute an additional $1,000 for a total of $6,500 this year. The monies you’ve contributed are always available to you tax free. To get the growth tax free, you must hold a Roth for at least 5 years and be 59 ½ at the time you take distributions.

like a traditional IRA, you must have “earned income” to contribute to a Roth, unless your working spouse contributes for you. If Modified Adjusted gross Income is over $127,000 filing single or over $188,000 filing married jointly, then you

cannot contribute to a Roth IRA.

2) Investment Grade Life Insurance — Most folks are simply not aware that life insurance can be used as a retirement tool. Sec. 72(e) and 7702 of the U.S. tax code states that life insurance benefits to an individual are tax-exempt. The trick is that you typically need 15 – 20+ yrs. to make it work, but it will work wonderfully if properly structured, properly funded, reasonable rates of return are calculated, and guarantees are built in. The strategy is to “overfund” the policy and build “cash value”. The cash value is then taken at a later date for income, tax free! This is done through a policy loan. If the loan is not paid back, it is simply deducted from the death benefit proceeds.

An Indexed Universal life (IUl) policy guarantees that you never lose your principal, and captures a portion or all of a market index gain, such as the S&P 500. View it as just the opposite of most insurance plans. Usually people want the highest death benefit for the lowest

premium, and are not concerned about future cash value (term insurance). with an IUl strategy, you determine what you want to contribute each year, and then the policy is designed with the lOwEST death benefit allowed by law, based on the premium. Remember, the goal is to build the cash value for future use and “tax free income”.

The advantages of “Investment grade life Insurance” are plenty. Tax-deferred growth, competitive rates of return with no risk, living benefits such as terminal illness/disability/long term care riders, no limits on what you can contribute, tax free income at a later date, and of course a tax free death benefit for family protection should death occur. Again, remember the question asked of the farmer, “would you rather pay tax on the seed or the harvest”? I think the answer is obvious.

There are a few very good books written on these strategies that I suggest you read if interested in this type of planning. I’ve read and

studied under these individuals, and I can tell you it was a real eye opener.• TaxFreeRetirement - Patrick Kelly• MissedFortune&MissedFortune

101– Douglas AndrewAs always, if any of our readers have

questions, would like to attend one of our events, or would like a free consultation, visit our website, give us a call, or stop by the office.

Sincerely, James D. Stillman

James D. Stillman is a licensed insurance professional, Certified Senior Advisor, Registered

Financial Consultant and member of the Million Dollar Round Table. He is the founder and

president of two companies, JDS Enterprizes, Inc. and JDS Wealth Management Corp.

James D. Stillman, Owner and President of JDS Wealth Management Corp.

JDS Wealth Management Corp.119 Poplar Pointe Drive, Ste. F,

MooresvilleHours: 9 a.m. to 5 p.m. Monday through Friday.

704-660-0214www.jdswealthmanagement.com

Tax Free Retirement: Is It Even Possible?

Jessica HarveyMrs. North Carolina America 2012

Smile created by Dr. Ross W. NashPhoto by Shane Greene

403 Gilead Road • Suite E • Huntersville NC 28078(704) 895-7660

www.Cosmetic Dentist of Charlotte.com

Ross W. Nash, DDS

Cosmetic Dentistryof the Carolinas

Of the nearly 8000 American Academy of Cosmetic Dentistry members worldwide, there are only 45 who have achieved the exclusive level of Accredited Fellow. In all of North and South Carolina, only one dentist has earned this elite status by illustrating the required level of excellence in the area of cosmetic dentistry: Accredited Fellow Ross W. Nash, DDS.

General & CosmeticDental Care