Tax Free Retirement Plan

Understanding Tax-Free Retirement

Many people do not have a complete understanding of the tax implications that are connected to retirement planning. With retirement planning, taxes are deferred until retirement years, but many clients don’t have a clear vision as to what that means for their post-retirement lifestyle. One Stop Financial Group protects your interests by taking tax and insurance regulations and using them to design a tax-free retirement income plan.

What is a Tax-Free Retirement Account (TFRA)

A tax account is considered tax-free if there are no taxes (federal or state) due on the income earned. You can invest your money without owing future taxes on said growth. You don’t even incur additional taxes after you withdraw the funds to spend for personal use. To find out if you qualify for a tax-free retirement account, contact One Stop Financial Group for a consultation!

What Are the Benefits of a Tax-Free Retirement Account (TFRA)?

The biggest benefit of a tax-free retirement account is that you don’t pay taxes on financial growth! You are also not required to report the “income” inside of this account to the IRS. In order to set up a legally correct account that is up to the most current IRS tax codes, speak to your retirement consultant for more information.

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What Is Rule 7702?

Rule 7702 pertains to 7702 of the U.S. Internal Revenue Service 9IRS) Tax Code. It is the section that defines what the federal government considers to be a legitimate life insurance contract. The rules outlined in this section direct how the proceeds from a life insurance contract are taxed. Because profits from legitimate life insurance contracts are not considered to be ordinary income and are therefore tax-favored, it is essential to ask your financial advisor if your life insurance contract abides by Rule 7702.

Why Does Rule 7702 Exist?

Making life insurance contracts tax-favored seems like a naturally reasonable course of action because the government does not want to appear as if it is unjustly taxing widowed spouses or children. However, some investment vehicles have been passed off as life insurance products using similar contract methods. Rule 7702 prevents policies masquerading as life insurance policies from collecting favorable tax treatment.

Get Your Free Tax-Free Retirement Plan Quote

One Stop Financial Group is committed to providing thorough, lucrative financial services to the Greater New Orleans area and surrounding communities. Contact us to learn more about how we can help you achieve your financial goals with a free Tax-Free Retirement Plan estimate!

Free Tax-Free Retirement Plan Quote