Tax Reduction Case Studies

The following case studies are excerpts from The LASER Fund (www.laserfund.com).

Also by Douglas R. Andrew, Emron D. Andrew & Aaron R. Andrew

Millionaire by Thirty

Also by Douglas R. Andrew

Best-Sellers

Missed Fortune
Missed Fortune 101
The Last Chance Millionaire

Entitlement Abolition
Learning Curves
Secrets to a Tax-Free Retirement
Baby Boomer Blunders
Create Your Own Economic Stimulus
How to Have LASER Focus

Published 2018
Salt Lake City, UT U.S.A. Printed in U.S.A.

©Douglas R. Andrew, Emron D. Andrew & Aaron R. Andrew. All rights reserved. No part of this work can be copied
in whole or part in all forms of media.

DISCLAIMER: With any mention of The LASER Fund, maximum-funded tax-advantaged insurance contracts, or
related financial vehicles throughout this book, let it be noted that life insurance policies are not investments and,
accordingly, should not be purchased as an investment.

Where appropriate, authentic examples of clients’ policies have been incorporated, with names changed to
safeguard privacy.

The materials in this book represent the opinions of the authors and may not be applicable to all situations. Due to
the frequency of changing laws and regulations, some aspects of this work may be out of date, even upon first
publication. Accordingly, the authors and publisher assume no responsibility for actions taken by readers based
upon the advice offered in this book. You should use caution in applying the material contained in this book to your
specific situation and should seek competent advice from a qualified professional. Please provide your comments
directly to the authors.

2
 Tax Reduction Case Studies

Contents
INTRODUCTION ................................................................................................................................. 4

TAX REDUCTION ................................................................................................................................ 5

FROM HIGH TO LOW.......................................................................................................................... 6

THAT’S ENOUGH, UNCLE SAM ............................................................................................................ 7

A CPA – CONVINCED OF A BETTER PATH ............................................................................................. 8

THE ARTISTRY OF PRUDENT PLANNING .............................................................................................. 9

WHAT CAN GO WRONG ................................................................................................................... 10

MAXIMIZING YOUR FUTURE ............................................................................................................ 11

3
 Tax Reduction Case Studies

Introduction

T
hey had just turned age 60 when they started to seriously analyze their
retirement plans. The Garners had spent their careers working hard, earning a
moderate income. They anticipated they would have enough for retirement
between their pensions and other traditional accounts (including 401[k]s, 403[b]s, and
TSAs—with a total value of $250,000). They had just rolled these supplemental
accounts over into an IRA, and were wondering whether they should begin
withdrawing money from the IRA during their 60s, or wait until later. At the advice of
an accountant, they were leaning toward waiting until their 70s, thus deferring and
delaying the inevitable tax. They met with us to look more closely at overall, long-
term tax-minimization strategies and immediately saw the fallacy in continued tax-
deferral.
If they waited until age 70½ to start taking RMDs, they could end up sending as much
as $250,000 in taxes to Uncle Sam over the course of their retirement years (because
they would be “stretching the IRA out” to their life expectancy). This was shocking, as
they only had $250,000 total in their IRA at the time. They couldn’t afford to give Uncle
Sam that much—and they wanted a better quality of life for themselves.
They ended up deciding to do a strategic rollout. Over the next five years, they moved
their money from their IRAs, got their taxes over with, and transferred their money into
a LASER Fund. By doing so, they ended up paying about $60,000 in total taxes on
that $250,000—which is over four times less than they would have if they had kept
their money in the IRAs.
Now their money continues to grow in their LASER Fund, where it is safe from
downturns in the market and can provide tax-free retirement income from this point
forward.

4
 Tax Reduction Case Studies

TAX REDUCTION
One of the best ways to make the most out of retirement income is make sure you
get the most out of your retirement income, rather than Uncle Sam. That’s why tax
reduction tends to be one of the primary reasons people choose LASER Funds.
If you’re putting money into a LASER Fund that has already been taxed (such as from
regular income, a money market, savings account, the sale of a property, etc.), once
inside your LASER Fund, your money can grow tax-deferred, and you can access it
tax-free and transfer it income-tax-free to your heirs upon your passing.
If you’re looking to put money into your LASER Fund from tax-deferred accounts, you
will likely want to do a strategic rollout (see more on strategic rollouts in The LASER
Fund book, get a copy at www.laserfund.com). This way you can minimize the impact
of taxes—and adhere to TAMRA—while you transition your money into a LASER Fund.
Now keep in mind, it’s not imperative to move every cent you have in tax-deferred
accounts to a LASER Fund. It is just as important to diversify your “tax portfolio” as it is
to diversify your financial portfolio. Depending on age, tax brackets, health, and other
factors, there may be compelling reasons to keep part or all of your money in tax-
deferred accounts. If so, there may be options for how to manage the money within
those accounts that can give you better liquidity, safety, predictable rates of return,
and tax advantages. It’s important to work with an experienced financial professional
to weigh all of your options and choose solutions that are best for you.

5
 Tax Reduction Case Studies

FROM HIGH TO LOW

Steve and Leslie Franks had
been in the highest tax bracket
for years. Now in their 60s, they
were looking ahead, and the
last thing they wanted to do
was split their future
retirement income with Uncle
Sam any more than they had
to. Having suffered the ravages
of the Great Recession, they
were also eager to enjoy better
predictability without market
risk—and they wanted to
ensure their money would pass on income-tax-free to their children through a death
benefit.
They made a plan for a strategic rollout, taking into account their unique tax
implications. At the time, they were living in a state that did not have state income
tax—but they were planning on eventually moving to a state that would have
exorbitant state income taxes. Furthermore, federal tax brackets were set to increase
soon. The resulting strategic rollout was aggressive, moving as much as nearly $2
million from traditional accounts and paying over $600,000 in taxes in a single year.
While that may sound high, this strategy provided for considerable tax savings as
compared to if they had waited to pay taxes.
In the end, they transitioned their money into four LASER Fund policies—two for Steve
and two for Leslie—putting a total of $4 million into the policies. To further diversify
their portfolios, they worked with two different insurance companies and chose
different indexing strategies for each policy.
Fast forward ten years, and their money in their policies has grown to over $7 million.
Because their taxes are over and done with, as they start to take retirement income
now (just under $200,000 a year), they are doing so tax-free. With their tax-free
income, their mortgage and other deductions, they are effectively in a 0% tax bracket
now.
Going from paying the most in taxes to the least, the Franks are grateful to be looking
forward to an abundant retirement, one where taxes can no longer impact their
income, and where their heirs will receive an inheritance income-tax-free, through
the death benefit on their policies.

6
 Tax Reduction Case Studies

THAT’S ENOUGH, UNCLE SAM

With just a few years left before retirement, Jim Woodrow had a diverse retirement
portfolio awaiting him. But there was something nagging at him—one of his retirement
accounts was an IRA, with $100,000. While he would not necessarily need that IRA
for primary retirement income, he also did not want to pay more in taxes than
necessary.
He decided to do a strategic rollout over the next five years, getting the taxes over
with, and maximum funding a LASER Fund.
He has since finished the rollout, and his policy has been earning nearly 8% interest
per year. He has just started taking out a nominal amount, tax-free, to supplement his
retirement income—about $10,000 a year. He is relieved to have the taxes over with,
and glad to add that $100,000 going to work in a tax-deferred environment, providing
tax-free supplemental income, with the opportunity to pass along a death benefit to
his heirs.

7
 Tax Reduction Case Studies

A CPA – CONVINCED OF A BETTER PATH

As a CPA, Sydney Weston is meticulous about her finances. When she heard about
The LASER Fund through a professional networking group, she, like many people
learning about these strategies for the first time, was impressed … but hesitant. She
wondered if it could really provide benefits that IRAs and 401(k)s could not.
She examined details like IRS codes 7702 and 72(e). She explored the safety of
entrusting her money to 100-year-plus insurance institutions and a 0% floor during
market downturns. She weighed the living benefits, such as tax-free retirement
income.
Her thorough analysis did not stop there. She enlisted the keen eyes of colleagues,
including a chartered financial professional and tax attorney. These professionals
confirmed that the IRS codes were employed to create exactly the tax-free
retirement income that had been suggested; that the IRS codes 7702 and 72(e) would
in fact give her tax-free benefits for life; and that the structured format of the LASER
Fund could provide the safe, cost-effective, and tax-advantaged solution she was
looking for.
She opened a LASER Fund, and now enjoys the confidence of tax-free income—even
to age 100 and beyond—and an income-tax-free death benefit for her heirs when she
passes on.

8
 Tax Reduction Case Studies

THE ARTISTRY OF PRUDENT PLANNING

With a successful career as self-employed entrepreneurs in the arts, the Carters
realized they needed to get serious about setting money aside for retirement. They
veered away from IRAs and chose a LASER Fund, because they understood the value
of paying taxes on the seed rather than the harvest.
They put about $3,000 a month into their policy to maximum fund their policy, but
they wanted to do more. They sold their large home and downsized to a beautiful
retirement community, then used the
$300,000 from the sale of their home (which was capital-gains-tax-free) to create a
second LASER Fund.
Over the past ten years, their LASER Funds have given them greater financial
flexibility to pursue their other passions, including serving religious and humanitarian
missions and traveling to visit their children and grandchildren. They pay taxes only
on their earned income from their art business, and the rest—about $30,000 a year—
is tax-free income from their LASER Funds. Like many of our clients, they are enjoying
a lifestyle that is more than double what is reflected in earned income on their tax
returns—which is in perfect compliance with tax codes.
Not only are they enjoying a more abundant life now, but they have the reassurance
of knowing they will pass along that abundance to their children upon their passing,
through the income-tax-free death benefit on their policies.

9
 Tax Reduction Case Studies

WHAT CAN GO WRONG

The Smiths had $450,000 in taxed-as-earned accounts, and they were tired of getting
hammered on taxes. As soon as they learned about The LASER Fund’s tax-deferred
growth, tax-free access to money, and income-tax-free death benefit, they were
ready for a brighter tax future.
They repositioned their money and were enjoying the tax-deferred growth for several
years when they met with a financial advisor who was not well-versed in LASER
Funds. He insisted they would do better by pulling their money out and allowing him
to put it to work in the market.
We cautioned them—canceling the policy would trigger a tax event on the money
their policy had gained over the years. Their policy had been averaging about a 9%
annual rate of return, and its cash value was now over $900,000. They were
determined, however, and followed through with their plan. They were shocked when
April 15 rolled around and they had to pay taxes on the growth—totaling about
$150,000 in taxes.
If they had left their money in the policy, it could have continued to grow tax-deferred,
provided tax-free access to money, and income-tax-free transfer of wealth to their
children through the death benefit. Instead of a tax reduction, they experienced tax
devastation.

10
 Tax Reduction Case Studies

MAXIMIZING YOUR FUTURE

While paying taxes is an important responsibility for all of us as Americans, by utilizing
proven strategies, it is possible to get necessary taxes over and done with, and avoid
paying unnecessary taxes. With The LASER Fund’s tax advantages, you can give
yourself the ultimate advantage during retirement—tax-free retirement income and
income-tax free wealth transfer to your heirs.
You can also enjoy greater liquidity, safety, and predictable rates of returns that can
empower you to bring opportunities to your children and grandchildren, to give more
to charity, and to pursue personal pastimes.
In all, whether your goals include accessing working capital, managing risk in
business planning, protecting yourself with emergency funds, or reducing your taxes,
The LASER Fund’s versatility can help you maximize your future in multiple ways. In
addition, The LASER Fund’s income-tax-free death benefit provides a way to transfer
your wealth to future generations.
As you combine these strategies for the Financial Dimension with tactics for your
Intellectual and Foundational Dimensions, you can leave a lasting legacy for
Authentic Wealth to future generations. We wish you all the best as you move
forward, toward a brighter, more abundant future.

11
 Tax Reduction Case Studies

Your next steps

We would invite you to take one of the two actions below:

1. Request to meet with one of our Wealth Architects and see how these
strategies would apply to your specific situation. This will allow you to weigh
your options with the help of our expertise – and without sales hype or
pressure. The clients of our firm are long-term, therefore we want these
strategies to be a good fit for you and us.

Call us at 888-987-5665 or go to www.LiveAbundant.com/getstarted to

request a brief 15-minute quick consultation. Based on your quick consult, we
will match your specific needs with one of our Wealth Architects, a financial
professional who best meets your criteria and financial situation.

2. Learn more by attending a live seminar or webinar. You can register for a free
event at www.LiveAbundant.com/events or call us at 888-987-5665.

12