Van Mueller's Monthly Newsletter: March 2018

We look forward to the Van Mueller newsletter every month. It's chock-full of sound bites, sales tips, and eye-opening statistics. Here are our favorite parts of the March 2018 edition. We're sharing the full introduction, and 2 of the 7 monthly sales ideas. If you like what you read, we encourage you to click here and become a subscriber.

Reprinted with the author's permission.

March, 2018 – 7 Ideas and Views Newsletter by Van Mueller

Last month we provided you with information about a couple over age 65 or a single person over age 65 as it related to the new tax law. It attempted to show you that there is a spectacular opportunity to use the progressive tax rates to reallocate “Forever Taxable” money to “Never Taxable” money. It would also allow you to use leverage to provide long term care benefits, reduced or eliminated income tax liability, tax free lifetime income, protection from investment losses, opportunity for investment gains while maintaining almost complete access to the cash values.

Sounds amazing, doesn’t it? That is the description of a cash value life insurance policy.

This month we are providing you with a more realistic example of that same information. We are using examples of prospects and clients that have Social Security benefits.

We used $30,000 of Social Security for a married couple and $15,000 for a single person because the average Social Security check in America is slightly over $15,000.

Now, you can see that even causing up to 85 percent of our clients Social Security to become income taxed, which is the maximum by the way, it is still spectacularly advantageous for our prospects and clients to examine and then employ this strategy.

We give examples using the zero, 10 percent, 12 percent, 22 percent and 24 percent tax brackets. When families work together the tax savings are dramatic.

When families work together the tax savings are dramatic.

Please Google and then acquire any reputable source that illustrates the changing tax brackets for next year. These sources will also explain the expansion of the standard deduction and the elimination of the personal exemptions.

Then read the pages of this newsletter entitled: Married Couple Over Age 65, assuming $30,000 of annual Social Security. Continue to read: Single Over Age 65, assuming $15,000 of annual Social Security.

READ THESE PAGES 50 TIMES UNTIL YOU UNDERSTAND THIS STRATEGY COMPLETELY. YOU WANT TO BE CONVERSATIONAL WITH THIS INFORMATION!

It will help you to reallocate fully taxable money allowing the prospect or client to be in control of the tax rates they are paying rather than delaying and allowing the Internal Revenue Service and the government to create the rate.

The reallocation of these benefits will provide a way to cover long term care and to prevent investment losses while creating access to the money that wasn’t lost to take advantage of investment opportunities. Instead of paying ordinary income tax or investment gains in qualified money you would now provide the opportunity with the converted non-qualified money to build long term capital gains which in most cases have a maximum of 15 percent tax and could even provide opportunities to pay no capital gains tax if you are in the zero, 10 or 12 percent ordinary income tax bracket.

The reallocation of these benefits will provide a way to cover long term care and to prevent investment losses.

This idea will change your career. Better than that, you will provide real benefits to families who are trying to deal with the ever-increasing challenges of higher taxes, lower benefits, inflation, volatility, longevity and long-term care.

Dollars that are dramatically more efficient because you have reduced or eliminated the income tax and the additional leverage provided by cash value life insurance policies allow the American people to stay in control of their financial and retirement futures.

This strategy allows you to move enormous amounts of money from fully taxable scenarios to more effective and efficient dollars the can provide multiple benefits.

THIS IDEA IS A CAREER CHANGER!

1.
Social Security: $30,000
Standard Deduction in 2018: $26,600
Total Income: $56,600

How Much is Taxable of the $56,600? $4,800

A married couple could withdraw $26,600 of fully taxable money in addition to their $30,000 of Social Security and only pay taxes on $4,800, which would be $480.

This couple could withdraw $56,600 of Social Security and fully taxable money every year for 20 years for a total of $1,132,000 and only pay $9,600 in federal income taxes over 20 years. That is less than 1 percent tax.

ASK THEM IF THEY SHOULD DO THIS!

20 years is the average life expectancy for couples over age 65.

2.
Social Security: $30,000
Standard Deduction in 2018: $26,600
10 percent tax bracket: $19,050
Total Income: $75,650

How much is Taxable of the $75,650? $65,803

A married couple could withdraw $46,650 of fully taxable money in addition to their $30,000 of Social Security and only pay taxes on $65,803, which would be $4,323.

This couple can withdraw $75,650 of Social Security and fully taxable money every year for 20 years for a total of $1,513,000 and only pay $86,460 ($4,323 x 20 years) in federal income taxes over 20 years. That is 5.7 percent effective tax rate.

3.
Social Security: $30,000
Standard Deduction in 2018: $26,600
10 percent tax bracket: $19,050
12 percent tax bracket: $58,350
Total Income: $134,000

How much is Taxable of the $134,000? $129,500

A married couple could withdraw $104,000 of fully taxable money in addition to their $30,000 of Social Security and only pay taxes on $129,500, which would be $14,517.

This couple could withdraw $134,000 of Social Security and fully taxable money every year for 20 years for a total of $2,680,000. They would only pay $290,340 ($14,517 x 20 years) in federal income taxes over 20 years. That is 10.83 effective tax rate.

4.
Social Security: $30,000
Standard Deduction in 2018: $26,600
10 percent tax bracket: $19,050
12 percent tax bracket: $58,350
22 percent tax bracket: $87,000
Total Income: $221,000

How much is Taxable of the $221,000? $216,500

A married couple could withdraw $191,000 of fully taxable money in addition to their $30,000 of Social Security and only pay taxes on $216,500, which would be $34,167.

This couple can withdraw $221,000 of Social Security and fully taxable money every year for 20 years for a total of $4,420,000. They would only pay $683,340 ($34,167 x 20 years) in federal income taxes over 20 years. That is 15.5 effective tax rate.

5.
Social Security: $30,000
Standard Deduction in 2018: $26,600
10 percent tax bracket: $19,050
12 percent tax bracket: $58,350
22 percent tax bracket: $87,000
24 percent tax bracket: $150,000
Total Income: $371,000

How much is Taxable of the $371,000? $366,500

A married couple could withdraw $341,000 of fully taxable money in addition to their $30,000 of Social Security and only pay taxes on $366,500, which would be $72,207.

This couple can withdraw $371,000 of Social Security and fully taxable money every year for 20 years for a total of $7,420,000. They would only pay $1,444,140 ($72,207 x 20 years) in federal income taxes over 20 years. That is 19.5 effective tax rate.

6.
#1. Pay only $9,600 to eliminate taxes on $1,132,000 over 20 years. The effective tax rate is less than one percent.
#2. Pay only $86,460 to eliminate taxes on $1,513,000 over 20 years. The effective tax rate is 5.7 percent.
#3. Pay only $290,340 to eliminate taxes on $2,680,000 over 20 years. The effective tax rate is 10.83 percent.
#4. Pay only $683,340 to eliminate taxes on $4,420,000 over 20 years. The effective tax rate is 15.5 percent.
#5. Pay only $1,444,140 to eliminate taxes on $7,420,000 over 20 years. The effective tax rate is 19.5 percent.

7. The magic of the progressive tax law is that the client can control their income tax liability during a period of historically low tax rates. If they wait until they die the tax liability could easily increase to 30 or 40 or even 50 percent because it is now controlled by the Internal Revenue Service.

8. At each of the above income levels you can reallocate “forever taxed” money into “never taxed” products like annual premium life insurance, modified endowment contracts (MECs) or preferentially taxed products like annuities if the prospects or clients are uninsurable. You can reallocate the money after it has been withdrawn and the taxes have been paid on the withdrawals.

9. This strategy is used to reduce or eliminate taxes on IRA and 401k withdrawals. This can also be used to eliminate deferred gains on existing annuities. It can be used to eliminate capital gains taxes for people in the 0%, 10% and 12% tax brackets. Remember The Rule of 104-12. If a married couple over age 65 make less than $104,000 they are in the 12 percent ordinary income tax bracket.

That puts them in the 0% capital gains tax bracket. This is a great opportunity to access capital gains in stocks, bonds, mutual funds and real estate.

10. Life Insurance and Annuities Also Feature These Benefits:

• No Probate (With named beneficiaries)
• Incontestable and Private
• Control from the grave
• Creditor and predator protection
• Medicaid versatility

1.
Social Security: $15,000
Standard Deduction in 2018: $13,600
Total Income: $28,600

How Much is Taxable of the $28,600? $0

A single person couple could withdraw $13,600 of fully taxable money in addition to their $15,000 of Social Security and only pay no taxes. None of this person’s Social Security would be taxable in this example.

This person could withdraw $28,600 of Social Security and fully taxable money every year for 20 years for a total of $572,000 and pay no federal tax: None!

Let’s say the client lives on $26,600 per year. You could show them that they could withdraw another $2,000 per year of fully taxable money and pay no income tax. What could you do with that additional $2,000 per year? Of course, a cash value life insurance program.

2.
Social Security: $15,000
Standard Deduction in 2018: $13,600
10 percent tax bracket: $9,525
Total Income: $38,125

How Much is Taxable of the $38,125? $25,938

A person could withdraw $23,125 of fully taxable money in addition to their $15,000 of Social Security and only pay taxes on $25,938, which would be $1,291.

This person could withdraw $38,125 of Social Security and fully taxable money every year for 20 years for a total of $762,500 and only pay $25,820 ($1,291 x 20 years) in federal income taxes over 20 years. That is 3.38 percent effective tax rate.

3.
Social Security: $15,000
Standard Deduction in 2018: $13,600
10 percent tax bracket: $9,525
12 percent tax bracket: $29,175
Total Income: $67,300

How much is Taxable of the $67,290? $65,040

This person could withdraw $52,290 of fully taxable money in addition to their $15,000 of Social Security and only pay taxes on $65,040, which would be $7,257.

This person could withdraw $67,300 of Social Security and fully taxable money every year for 20 years for a total of $1,346,000 and only pay $145,140 ($7,257 x 20 years) in federal income taxes over 20 years. That is a 10.8 percent effective tax rate.

4.
Social Security: $15,000
Standard Deduction in 2018: $13,600
10 percent tax bracket: $9,525
12 percent tax bracket: $29,175
22 percent tax bracket: $43,800
Total Income: $111,000

How much is Taxable of the $111,000? $108,850

This person could withdraw $96,000 of fully taxable money in addition to their $15,000 of Social Security and only pay taxes on $108,850, which would be $17,150.

This person could withdraw $111,000 of Social Security and fully taxable money every year for 20 years for a total of $2,220,000. They would only pay $343,000 ($17,150 x 20 years) in federal income taxes over 20 years. That is a 15.5 effective tax rate.

5.
Social Security: $15,000
Standard Deduction in 2018: $13,600
10 percent tax bracket: $9,525
12 percent tax bracket: $29,175
22 percent tax bracket: $43,800
24 percent tax bracket: $75,000
Total Income: $186,000

How much is Taxable of the $186,000? $183,750

This person could withdraw $171,000 of fully taxable money in addition to their $15,000 of Social Security and only pay taxes on $183,750, which would be $36,138.

This person could withdraw $186,000 of Social Security and fully taxable money every year for 20 years for a total of $3,720,000. They would only pay $722,760 ($36,138 x 20 years) in federal income taxes over 20 years. That is a 19.4 effective tax rate.

Ask all of these people, “If you could eliminate taxes on huge amounts of money for tax rates of 20 percent or less, WOULD YOU? Do you want to be in control of the taxes you pay or do you want to leave the control to the Internal Revenue Service and the government?” Americans need to understand this is available to them.

I would like to review a couple of other things before we start the ideas.

This information can be gleaned from www.usdebtclock.org and www.truthinaccounting.org.

I have been trying to explain to everyone, prospects, clients, agents and advisors why the stock market hasn’t crashed yet, even though all the information that we have access to says it should have already.

There is a saying in the financial world. “Liquidity trumps economics.” The world is awash in liquidity. This is where sources like, Truth in Accounting and US Debt Clock become invaluable.

The US Debt Clock says that in the year 2000 our country’s money supply was $4.7 trillion. Currently the money supply is over $14 trillion. Where did that money come from? It was printed.

The Federal Reserve Bank saw its balance sheet grow from $400 billion to almost $5 trillion so they could exercise quantitative easing and recapitalize the banks. Where did that money come from? They printed it.

Who else printed money? The rest of the world: China, Japan, South America and Europe have bought the Kool-Aid that the United States is selling and they are printing money at an astounding pace. Because most of the world had negative interest rates, that money was being invested here. That spectacularly increased liquidity has propped up our stock market for almost a decade. They continue to do this. The first sales idea will address this situation.

Truth in Accounting just reported that 64 out of the 75 biggest cities in the United States do not have enough money to pay their bills. This unfunded debt amounts to $335.4 billion. Remember cities can’t print money.

Truth in Accounting also reports that the states have unfunded liability of over $1.5 trillion.

Truth in Accounting also reports that in 2018, new accounting rules require states to account for the unfunded liability for healthcare of $423.5 billion. If they can’t print money won’t this money come from higher taxes, lower benefits, more borrowing or a combination of all those ingredients? Ask your client.

Here are some additional facts that can be discovered at these two sites.

United States 20.0 trillion GDP
United States 20.6 trillion Debt

We collect $3.3 trillion of taxes at the Federal level.
We collect $3.1 trillion of taxes at the State and Local level.

The budget for the U.S. Government is $4 trillion. The new proposed budget is $4.4 trillion. We only take in $3.3 trillion of taxes. What does that mean? Doesn’t that mean trillion-dollar deficits?

Total Debt of all U.S. Citizens: $69.4 trillion

Student Loan Debt $1.5 trillion
Credit Card Debt $1.1 trillion
Social Security’s unfunded liability $17 trillion
Medicare’s unfunded liability $26 trillion

U.S. unfunded liability $112 trillion

Of the $4 trillion-dollar budget, $3.6 trillion goes for these 7 things:

• Medicare
• Medicaid
• Social Security
• Defense/Homeland Security
• Income Security
• Interest on Debt
• Federal Pensions

We spend more on those 7 items than we take in by almost one half trillion dollars.

There are 327 million people in the U.S., 121 million are taxpayers - 52 million receive Social Security. That is 2.3 taxpayers for every recipient. That wasn’t supposed to happen until 2030.

57 million receive Medicare benefits. That is 2.1 taxpayers for every recipient.

75 million Americans are on Medicaid. That is almost one out of every four people in America. The total number of Americans receiving benefits in our country is 165,589,369. That is 35 million more people than there are taxpayers.

The official unemployment in our country is 6,664,470. The actual unemployment in our country is 13,174,693. The workforce in 2000 was 156,593,048. It is now 154,677,922. It is less almost a generation later.

Finally, the median income in the year 2000 was $31,203. The median income in 2018 is $31,613. Essentially no difference a generation later.

We must ask our prospects and clients to prepare for a time in the near future when our governments, Wall Street, the banks, corporations, unions and companies will not be able to keep their retirement and healthcare promises.

Ask them if they would like success whether these entities come through or not.

Finally, if you really understand what I am showing you here, you must take a serious look at www.vanmark.life. This site will give you and your agency the training you need to serve your prospects and clients and create a fabulous career for yourself.

Go to: www.vanmark.life.

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We're passing on two of the newsletter's monthly sales ideas - every issue of the newsletter contains 7 ideas, plus one idea for the Canadian market. Subscribe to get them all.

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Idea #1: Federal Pension Bailouts. More Printed Money.

This is a killer article. I could use this article alone to make the Million Dollar Round Table or higher.

A public pension did an internal study and discovered that a 10 percent or more decline in the stock market for an extended time of more than 3 to 4 months would blow up EVERY single public pension in the country.

The new spending budget passed by Congress snuck in a provision to create a way to bail out 200 multi-employer pension plans. Many pensions in our country are approaching insolvency. What will happen if we have a stock market decline?

The Federal Reserve QE account will be used to create $100 billion in liquidity. Who pays for this? That’s right… Taxpayers!

This short article will help you inspire lots of prospects and clients to take action.

Use the idea in the front of the newsletter to help prospects and clients reduce their exposure to taxes.

Title: Is Fed Pumping Stocks to Keep Pensions Solvent?
https://seekingalpha.com (Seeking Alpha, February 27, 2018)
https://seekingalpha.com/article/4150969-fed-pumping-stocks-keep-pensions-solvent

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Idea #7: Retiree Health Care Costs. Astonishing!

By 2030, 42 percent of the people on Medicare will spend 20 percent or more of their incomes just on out-of-pocket health expenses.

In 2013 the average person on Medicare used 41 percent of their Social Security just for out-of-pocket health care expenses.

Healthview Services says a 45-year-old couple will need more than $635,142 for healthcare costs in retirement. A 55-year-old couple will need $498,962 and a 65-year-old couple retiring now will need $404,253 just for healthcare costs. This doesn’t include long term care requirements.

Compare that to information provided previously in this newsletter. The average Social Security benefit annually is around $15,000. The median income for Americans is $31,600. What will happen to the quality healthcare for most Americans? We must ask every grandma and grandpa to preserve, safely grow and yes even leverage their money so their children and grandchildren have a fighting chance.

I make a lot of sales using the information from these two articles.

You can also.

Title: Out-of-Pocket Healthcare Costs to Rise for Medicare Beneficiaries
https://patientengagementhit.com (Patient Engagement HIT, February 5, 2018)
https://patientengagementhit.com/news/out-of-pocket-healthcare-costs-to-rise-for-medicare-beneficiaries

Title: Want to Know What Senior Healthcare Costs Will Look Like in 20 Years? Here’s a Peek
www.fool.com (The Motley Fool, February 11, 2018)
https://www.fool.com/retirement/2018/02/11/want-to-know-what-senior-healthcare-costs-will-loo.aspx

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Did any of these ideas resonate with you? Have you used any of them in talks with clients? Tell us in the comments!