You often hear the term “Pay yourself first”. That means you want to be sure you take care of you before you take care of your bills and other financial obligations. Unfortunately in the real world it is not always realistic. You really cannot neglect your mortgage or you will be on the streets. All of the $20 here and $20 there begin to add up.
Well here is an idea. Start your retirement today and use your tax-refund. Make your annual contribution when you get the refund.
There are a few kinds of money. First is FREE MONEY, that is like in your 401 (k), the part that the company matches. That is great, unfortunatly though 401 (k) plans can and do lose money. Then there is TAX FREE MONEY, which you usually can only obtain through a 7702 (a) plan, which is basically the growth of a cash value life insurance plan. Then Tax deferred money. The downside to tax deferred money, while in theory you hope to be in a lower tax bracket when you retire, I think with the debt this country is in, the odds are very good you will be in a higher tax bracket at that time. The least appealing money is the money we get paid with which is taxable money.
The nice thing about a cash value life policy, particularly an Indexed product, is you can design the plan around what you can pay. You take a lower death benefit to maximize the growth.
Instead of buying that new TV with your tax refund, invest in your life.
Thanks for reading.
Eric Wilson is President of I Sell Health, Inc. A Chicago Area insurance agency. He can be reached toll free at 888-448-5370.