There is a book that came out in the last few years called: The Power of Zero: How to Get to the 0% Tax Bracket and Transform Your Retirement and it is written by David McKnight. This is one of those books that was a game changer for me when my mentor suggested I read it.
He told me, we always ask prospective clients, “Has anyone talked to you about the Tax Implications of the Accounts you are putting your money into?”
90% of them respond, in the negative. They haven’t thought too much about it and wether their employer was matching their contributions or not they are funding these types of accounts.
Most of them say things like, “I just know that I pay tax on the money when I pull it out, isn’t that right?”
The answer is, yes and no.
He said, “Let me ask you a question?
You just qualified for a home loan. Hey Eric, I’m going to give you this Half Million $ loan on your home. Congratulations. I don’t need you to show me proof of income, proof of job history, proof of employment or any of that. All I need you to do is sign on the dotted line and the loan is yours. The only catch is, I’m not going to tell you what you owe on interest until the 30 years of your loan done. 30 years from now I’m going to tell you what you owe me in interest and whatever I tell you you have to pay.
Would you take that loan?
I said No. Because I don’t know what the terms are. I don’t know what I owe on the interest.
Then he continues: SO, Eric, I’m going to let you put money into this account and I’m not going to tell you what you owe me in tax. I’m going to let you assume that. And when you retire 30 years from now, Im going to tell you what you owe me in tax. And whatever tax bracket I tell you that you are in for this account is what you owe me.
Does that deal sound good?
Not really, right.
There is a little more to it than just paying tax at retirement. I’m actually in the next few minutes going to show you exactly what you are going to owe in tax.
You probably are thinking, I don’t know what I’m going to owe on taxes, so how are you going to show it to me? But if you can show it to me great...
Check out the Free Case Study and find out what my mentor showed me about True Diversification that would change course of my life, and all of my clients lives as well.
