If you could earn stock market based returns without risk and 100% tax free in an IRS approved retirement account, would you be interested? What if this account earned interest based on market performance in the good years, but guaranteed you would never lose any money in the bad years?
What if a 7702 Private Plan could, almost like magic, balloon in value to much more than you put in if you were diagnosed with a terminal or chronic illness and needed money now? And among other features not in your current retirement account, what if the money you saved was much more liquid than a 401k, 403b, IRA, SEP, ROTH, KEOGH or other traditional IRS approved plan? That would sound like a pretty good retirement plan wouldn't it? Would you think it is worth it to read this article over the next 10 minutes to find out?
If you said yes and you are willing to invest a few minutes reading then you are about to learn how to properly structure a 7702 Private Plan and earn tax free market based returns with $0 at market risk. The people who do a little research and work with a reputable professional to get it right increase retirement lifestyle significantly because a properly structured 7702 Private Plan is a set it and forget it type of account. It will perform your entire life earning risk free market based gains and rewarding you with tax free retirement income for life. 7702 Private Plan accounts also have more flexibility and fewer limitations than traditional 401k, 403b, IRA, SEP, ROTH, or KEOGH accounts.
The information in this article and an hour invested with a local licensed professional in your area can change your retirement future. Once you know the few simple steps to a properly structured 7702 Private Plan, you have the control to create the most powerful IRS approved tax free retirement plan available. You will learn how to pay the lowest possible cost and earn annual interest based on gains in the S&P 500 market index every year without risk. This article will explain the investment secret insurance companies have used for years to earn market returns but risk nothing year after year, and now you can do the exact same thing in your own 7702 Private Plan.
Set your 7702 Private Plan once and it will perform for rest of your life earning you market index returns based on the S&P 500. This is not some obscure market index, S&P 500 consitently beats the vast majority of mutual fund accounts over time, and is the standard by which virtually all fund manager's net performance is compared.
Prior to IRS ruling 7702, only select wealthy Americans could afford to pay an entire financial team, (a tax attorney, CPA, insurance specialist, bond trader, and options trader) to create a very complicated tax free personal retirement package or “Private Plan.” Now the playing field has been leveled and anyone can easily create their own tax free Private Plan under the new IRS Ruling 7702.
Structure, not Market Timing = Success
Properly Structured, modern 7702 Private Plans are very simple considering the complex method of investing it would take to get the same result investing outside of a Private Plan. But beware, there are many advertisements and sales pitches from marketing companies who hide excessive commissions and produce poor returns. This article will give you the insight on how to properly structure a tax free 7702 Private Plan, pay the lowest possible commissions and fees and outperform the vast majority of mutual funds with $0 ever at risk to market losses.
You will never pay mutual fund fees or trading commissions in a properly structured 7702 Private Plan account but you will earn returns based on the performance of 500 different major corporate stock prices, the S&P 500 index.
When you are ready to access your money there are no age 59 ½ IRS or State penalties and your account is never taxed on the gains earned or income paid out. Income from a 7702 Private Plan doesn’t count against your eligibility to receive Social Security benefits like other investment income can. Finally any funds remaining in your account will pass tax free to your heirs.
Does this sound like a good retirement account candidate to you? It should because a properly structured 7702 Private Plan is the most powerful retirement account available, period.
The New 7702 Private Plan Tax Free Vehicle: Check the MPG and Horsepower.
Vehicles have hundreds if not thousands of individual components assembled together in a complex arrangement that when operating correctly, you to just put in the gas (your money) and off you go (retirement lifestyle). The same applies to a properly structured 7702 Private Plan, there are many different parts moving together to create a single retirement vehicle where all you do is put in the gas and off you go to tax free retirement.
The last time you bought a car did you ask about the specific alloy the manufacturer used for the pistons? Probably not, but you did look at the fuel mileage and asked about the horsepower right? That’s because there is a level of trust in the auto manufacturer’s ability to produce pistons that will operate for the life of the vehicle trouble free.
The same applies to investing in a 7702 Private Plan, by checking the financial ratings and history of an insurance company you are essentially checking the gas mileage of the Private Plan being offered. (all private plans must be administered through an approved State Licensed insurance company, and only State licensed professional insurance agents can offer a 7702 Private Plan. You won’t hear about 7702 Private Plans from financial gurus in magazine articles or on TV shows because they rely on advertising revenue from stock trading brokerages and mutual fund managers, neither of which want you even looking at their competition. The majority of CPAs and Financial Planners won’t tell you to invest in a Private Plan because State licensing law prevents most of these financial professionals from ever earning commissions or fees from a 7702 Private Plan)
Horsepower is another feature most people ask about before buying a new car. Poor performance, excessive fees, administrative costs and high commissions all reduce the horsepower of your 7702 Private Plan. This article will cover in detail exactly how to minimize the fees and maximize your returns on a 7702 Private Plan, it is actually very easy all you need to know is how the professionals are paid, but for now let’s look at the engine of a properly structured 7702 Private Plan retirement vehicle.
Earn Market Returns Risk Free, the 7702 Private Plan Engine
A 7702 Private Plan structured properly will earn returns without any risk based on the performance of the S&P 500 market index; you cannot ever lose money due to market performance but you still earn 100% of the market gains. Since there are only two categories of 7702 Private Plans, Fixed or Variable the choice is easy. What you need to know is the only vehicle that has a risk free market based engine is the Fixed 7702 Private Plan account.
State Law requires Fixed 7702 Private Plan account values to be guaranteed against market loss by the Insurance Company administering the plan. In a Variable 7702 Private Plan however, you can lose all your money. Often touted as having the ‘potential’ to earn more money than the fixed option, variable plans are heavily marketed. This is likely due to the higher commissions and fees paid to salespeople and marketing organizations from the insurance companies offering Variable 7702 Private Plans.
While the author of this article does recognize the unlimited potential of the Variable 7702 Private Plan, the reality is that most people who invest in the Variable option do not realize the results the average investor obtained in a Fixed 7702 Private Plan over 10 years. And if enough market losses occur in a Variable 7702 Private Plan, the account can ‘implode’ triggering heavy IRS penalties. Further, Variable 7702 Private Plans are most likely to implode during retirement, just when it can be afforded the least. The Variable 7702 Private Plan is just too risky in the author’s opinion, and is not suitable for most American’s main retirement savings account.
By design a properly structured Fixed 7702 Private Plan will earn 100% of the annual S&P 500 market index gain without any risk. The S&P 500 index is widely recognized and reported on regularly, there are historical charts available on nearly any financial services website including Google and Yahoo. The S&P 500 market index is also the standard by which most mutual fund manager’s performance is compared, and over time the S&P 500 index outperforms the vast majority of all mutual funds.
A Fixed 7702 Private Plan is the only IRS approved tax free retirement option that has $0 risk and still earns returns based on market performance. The S&P 500 will never realistically have the potential to earn 40% annual returns like some stocks can for short runs, but it does consistently produce 8-12% returns over a 10 yr period, better than most of the professionals over the same time period.
If you are curious about how the insurance companies can guarantee your Fixed 7702 Private Plan account against market loss, pay you 100% of the market gain and still make a profit, well it is sort of like asking what the alloy is in the pistons of that new car; simply put the insurance company uses a specific mathematic combination of bonds or other guaranteed investment and highly profitable but risky call options. If the risky investments (the stock market) don’t pan out at the end of the year, then the guaranteed investments will be worth exactly the original balance of the total account value at the beginning of the year. Of course if the stock market does perform that year, the insurance company earns market based returns on the options for its policy holders plus the original investment from the bonds. Heads you win, tails you don’t lose, this is how insurance companies can invest and guarantee their clients money profitably, and they do this with billions and billions of dollars every year. Even earning just 1% profit translates to hundreds of millions of dollars, believe me insurance companies are in this for a profit, they don't do it for free.
Reducing Commissions and Maximizing Return in a Private Plan
A Fixed 7702 Private Plan must be administered by an insurance company because this type of retirement plan is regulated under State insurance law. In order for a 7702 Private Plan to guarantee funding completion upon death, include disability benefits, and pay out tax free, insurance is required and there is a fee charged for this insurance. But unlike a mutual fund management fee, you actually receive a tangible benefit for the fee paid in a 7702 Private Plan. The insurance portion is also where the salesman earns a commission; his compensation is not based on your total investment like a mutual fund, his compensation is based on the smaller amount of insurance cost of the Private Plan.
IRS Rule 7702 creates a corridor for the minimum deposit/insurance value ratio in a 7702 Private Plan, your account must remain in this corridor to maintain tax free status.
In other words you can’t put $100,000 into your account and get $100,001 worth of insurance it just won’t qualify with the IRS. Existing funds in a Private Plan account have no IRS limit to earnings and will pay out tax free at any age. There is no contribution limit on a Private Plan, just a contribution ‘corridor’ that is a ratio of the amount you put in vs. the amount of insurance you must pay for. A properly structured Fixed 7702 Private Plan retirement account will have the least amount of insurance allowed by law, and therefore pay the lowest total costs. Since most people need at least some life insurance, the required insurance in a 7702 Private Plan can replace part of the insurance cost you might already be paying.
For instance, John and Mary are 42 years old and have 2 children. They are currently paying $84 a month for 20 year term life insurance with a total face value of $750,000. There is $500k death benefit on John and $250k on Mary. The minimum insurance requirement in their new Fixed 7702 Private Plan is $250,000 of permanent coverage, John and Mary are now able to reduce the amount of term insurance they have by the amount in their Private Plan and save $38 per month on their monthly insurance costs; John and Mary will also enjoy better benefits from the 7702 Private Plan than in the existing term coverage. (Fixed 7702 Private Plans structured correctly will allow you to access the larger insurance benefit, not just the account value if you are chronically ill, terminally ill or severely disabled. Inexpensive term insurance rarely allows this option and these benefits are just not available in traditional IRS Qualified plans)
The bottom line to reducing commissions in a Fixed 7702 Private Plan is to remain safely at the bottom of the IRS insurance requirement corridor. This reduces the total commission paid on the insurance portion, the less commissions paid the better your account will perform.
Often people still need more life insurance than what is in a 7702 Private Plan, if this is the case for you just purchase high quality low cost term coverage instead of increasing the insurance benefit in the Private Plan to increase performance. If the salesman who is offering you a Private Plan wants to talk about your ‘insurance needs’ being included in a 7702 Private Plan beware, likely he is just trying to increase the amount of insurance in your plan and the amount of commission in his check. There are exceptions, but as a rule of thumb stick with the minimum required insurance for your Fixed 7702 Private Plan, it’s that easy.
Managing a 7702 Private Plan for Life
A properly structured Fixed 7702 Private Plan is a simple to manage self directed tax free retirement account with some excellent benefits not available in traditional IRS qualified accounts. Just set it and forget it, this is an account you can have for life.
A 7702 Private Plan is flexible enough to meet major changes in life and remain completely safe from market losses. It can help with college funding, business financing and other major financial goals yet still be there to pay you tax free income payments at retirement. Just set how much you want to contribute each year, qualify for the insurance benefit and let it grow tax free. At the end of the year, if the S&P 500 is up 12% you know your account has earned 12%, if the S&P 500 loses 20% you’ll keep all of your money. Just put in the gas and go.
There are many options available for a 7702 Private Plan and the choices continue to grow every year, but before you invest always ask:
·Is this a Fixed or Variable 7702 Private Plan?
oOnly consider a Fixed 7702 Private Plan Account to earn market returns without market risk
·What is the Minimum Insurance Requirement?
oLess insurance cost, less commissions = more horsepower
oSafely stay at the bottom the insurance/contribution corridor requirement to reduce fees.
·What are the Financial Ratings of the Insurance Company
oOnly invest in an ‘A’ rated company with a long history
oBetter Ratings, Better MPG
·Which Market Index?
oLook for the S&P 500 index with 100% participation in the gains
oThe S&P 500 Index outperforms the vast majority of all mutual funds time
The 7702 Private Plan is an excellent opportunity to create your own financial security without risk. It takes a little research and about an hour to set up with a professional, but once that is done your Private Plan account will serve you for life.
You already know how to spot unnecessary sales pitches and attempts to get higher commissions, so it’s easy to see the bottom line and the possibility of a secure tax free retirement. Take the next step, find a local State licensed 7702 Private Plan Specialist and apply the strategies outlined in this article you will have a lifetime plan that will outperform most mutual funds, is guaranteed against losses and pays out tax free.
Properly Structured a 7702 Private Plan will automatically earn 100% of the annual gain in the S&P 500 tax free. Losses in the market index will earn 0% interest. Heads you win, tails you don't lose.
© 2008 Equity Integration Services is a group of independant licensed professionals providing high quality 7702 Private Plan retirement advice for individuals and business owners. For questions regarding your own Fixed 7702 Private Plan account please contact us here
How to Invest in a 7702 Private Plan