The Barefoot Retirement Plan utilizes section 72(e), and 7702 of the IRS code. The accumulation of cash inside the Guaranteed Index Account (GIA) is tax advantaged. Not only can the cash value accumulate tax-free, but the cash can also be accessed tax-free, and even passed on to your heirs, tax-free.
Hence, the beauty and magic of the GIA is that it’s a unique vehicle that allows tax-free account value accumulation, allows you to access your money tax- free, and, when you die, blossoms in value and transfers income tax-free!
The GIA is unique in that it offers both safety and opportunity. The safety comes from internal guarantees against market losses. The opportunity comes from account growth when the market grows, and gains that are locked in, each and every year.
At the end of the year, if the market has gone up 12%, your account is credited 12%. The account value is locked in, and will never decrease due to market losses. If the market goes up 18%, your account value grows up to the redefined cap (usually between 13%-17%, depending on the plan you choose). If the market goes down 20%, your account value does not decrease one cent due to market downturn.
The 0% floor gives you protection from any market loss. The GIA uses a small portion of your funds to purchase options on the S&P 500 index (and other indexes, depending on the plan you select). These options have a 0% floor, and typically a 17% cap on earnings. This means that the account value is completely protected from market decreases, but can still earn up to 17% per year, when the market grows. Let’s take a closer look and see exactly how this works.
The average American’s retirement accounts are far from where they need to be, to provide the kind of retirement they desire. In fact, 61% of pre-retirees fear running out of money during retirement, more than they fear death itself. That’s shocking! According to an analysis by Dalbar, the average investor only earned 2.1% over the twenty year period ended Dec. 31, 2011. After including inflation, the average investor had a negative real return. So the average investors' net real return was -0.4%. It’s no wonder people’s retirement accounts are looking anemic.
According to the Standard & Poor’s… Over 99% of Mutual Funds Consistently Underperform The S&P 500 Index. So, the S&P 500 Index is a pretty good place for your investments, right? Well, let’s take a closer look at it.
The chart below shows what would have happened to an investment of $100,000 back in 1998. The red line shows what would have happened if you had put your funds into the S&P 500 Index. The green line shows what would have happened if you would have put your funds into a GIA with the Barefoot Retirement Plan. The GIA account is worth almost $170,000 MORE than the S&P 500 account. That is 115% MORE of an increase.
There are many reasons for this huge difference. (You can learn a lot more details about this plan by reading our new book, The Barefoot Retirement Plan. FREE for a limited time.) One of the reasons why the GIA preformed so much better is because it NEVER loses money due to market downturns. Market downturns kill overall performance. You simply cannot reach the level of retirement success you want if you continue to violate Warren Buffett’s rules and experience losses.
The second largest killer of retirement dreams is TAXES. Regardless of how your retirement portfolio looks now, unless you have prepared for taxes that you are going to be hit with, you’re going to be in for a shock. For most people, taxes make up the single largest expenditure in their entire life. Many people are under the illusion that when they retire, they will have less income and thus their taxes will be lower.
Take a look at this chart that shows the data from the Congressional Budget Office (CBO). It projects how Government spending will have to increase, in order to pay for the growth of all these major entitlement programs.
Now, take a look at this chart and see just how high, the top Federal marginal tax rates have been. With spending out of control in Washington, our massive and unprecedented debt of over 17 trillion, almost 50% of Americans on some form or Government assistance, ask yourself this question. Do you really think taxes will ever go down in our lifetime? Plus, 10,000 Baby Boomers are now retiring every single day. Costs to maintain all of these Government program will inevitability force tax rates to soar.
In case you didn’t know, you’ll have to pay taxes on just about all of your retirement funds when you start drawing them out. You will pay taxes on your Social Security benefits, on your IRA funds, your 401(k) funds, etc. If you have a ROTH, municipal bonds, and a tiny handful of other tax free alternatives, those funds will be exempt from taxes. The huge majority of Americans retirement accounts are in qualified plans which means, they will have to pay taxes on every single penny they take out of them. Sadly, for many people, retirement is the time when they can least afford to divert any of their funds, to pay taxes.
The Great News Is, if you set up and fund your Barefoot Retirement Plan correctly, you will be able to grow your funds tax-free, take your funds out tax-free, and even leave the remaining funds to your hears tax-free.
The reason you have probably never heard of this before is because less than one tenth, of one percent, of Americans have ever heard of it. The wealthy have known about this for well over a century.
Plus, this super low-priced version of this plan has only been available for less than a year. Only to a handful of select experts have been able to get their hands on it to offer it to their clients. This plan is so unique, it’s been patented.
Our unique plan gives you more benefits than ANY OTHER retirement plan on the planet! That’s why our plan is referred to as, America’s Most Powerful Retirement Plan.
These benefits are built into your plan at little to no cost!
For many people, when they hear about this concept for the first time, they find it challenging to grasp. The question that most often comes up is, “How can I earn two different returns, from the same money, at the same time?” Actually the concept is not new. The rich have been using this same method for over a hundred years. Over 4,000 banks in the US have over 140 billion invested in these types of accounts. Many of the largest companies in the world have billions in these types of accounts. Over 700 of the Fortune 1000 companies have these accounts.
So why do some of the smartest financial experts in the world invest so heavily into these types of accounts? Simply put, they work. It’s one of the smartest places to put your money that you will ever find. Let’s walk through a quick, high-level example, to show you how the program works.
First, it is absolutely critical that you work with an advisor who is an expert with these types of programs. As great as these programs are, if they are not set up correctly, or managed correctly, you risk your program totally failing, being subject to taxes, fines, etc. Structuring these plans is what we do. We specialize in these plans and know exactly how to structure them to maximize your success. Once your plan is properly structured and funded, many clients choose the blended index option for their core plan. These funds can earn from 0% up to 17% each year, depending on the performance of the indexes. The key is that you will never go below 0% and you will never lose money due to market declines.
Then, if you choose to, you can borrow up to about 90% of those funds, and put them into ANY type of alternative investment that you wish. Any type! There are NO investment restrictions. If you want to expand your business, buy some new equipment, buy some rental properties, invest in gold and silver, it does not matter. You can invest in anything you wish and there are no approvals needed, no applications, etc. It’s your money and you can access it at ANY time you wish. If you want to pay back some or all of the funds you borrowed from your initial amount, fine. You can pay back any amount you wish, at any time you wish. And if you choose not to pay any of it back, that’s okay too.
The key and most important factor here is, you have the potential to earn two different returns, on the same money, at the same time. For example, let’s say you put $100,000 into your plan and you earn the 0% to 17% on that each year. Then, let’s say you borrow $90,000 from that account and put it into a real estate investment that you earn 15% on. You can earn whatever indexed market return on your initial funds, and then, at the same time, earn the 15% on your real estate investment.
(Please note, there are lots of different options and details to this, and there is no space here to give a complete explanation. This is just a high-level overview of the strategy. The best way to learn more about the plan, is to read our new book, available for free on this site now, for a limited time.)
You can always call us with questions and we will be happy to run some analysis for you for free to show you exactly what your Barefoot Retirement Plan can look like. This plan offers a very high degree of safety on your core funds, plus great potential returns, depending on market performance. It also offers excellent diversification by giving you the option to invest in other hard assets.