You Have Options

Beware of
What if those assets could grow and accumulate tax
-deferred so that they are available for use when you Personal Financial
need them most (retirement, emergencies, temporary
financing, etc.)?
Hazards
Part 2b
What if you could do this with a strategy that also
replaced income for your family in case something hap- You Don’t Have to Keep Creating Additional
pened to you? Taxable Income: Are You Repositioning Any After-
Tax Dollars to Create Tax-Free Future Income?
What if you could find a way to get tax-deferred ac-
cumulation no matter what your level of income?
Income Taxation
What if your strategy eventually returned more
than you put in, without tax, while leaving a legacy for The income tax system is very efficient and taxes al-
your family? most every type of income. Most income tax planning
focuses only on the first branch of income tax planning—
What if there was a way to create the dollars needed reducing this year’s income tax burden. Are you doing
in the future for pennies on the dollar today? anything to take advantage of the second branch of in-
Let’s Talk come tax planning—creating tax-free future income?
What is the primary source of your income? What assets
There are several powerful strategies that can help
do you own that produce income? How much of your in-
you accomplish these, and many other, personal finan-
come is taxable? What tax bracket are you in? What per-
cial goals. Let’s sit down and talk and you can decide if
centage of your income (and of the hours you spend
any of these strategies might be of interest to you.
working every year) goes toward paying taxes? Are you
Ardal Powell, MA, PhD working with a tax professional to reduce this year’s in-
New York Life/NYLife Securities come tax burden? As years pass by, are you missing the
460 Temple Hill Rd opportunity to create tax-efficient (or even tax-free)
future sources of income for yourself and your family?
New Windsor, NY 12553
(845) 202-9722
apowell03@ft.newyorklife.com
New York Life Insurance Company, its agents and employees may not provide legal, tax or accounting
advice. Consult your own professional advisors before implementing any planning strategies. © 2018
New York Life Insurance Company. All rights reserved.
SMRU 1778969 (exp. 06.30.2020)
Advanced Planning Group

Many people are unaware that they don’t need to
keep pushing all of their after-tax dollars back into a cy-
cle only to create more taxable income year after year.
Let’s look at a hypothetical example.
Are your income streams subject to multiple
types of taxation without any that are
income-tax-free?
Let’s Look at the Numbers
There are three stages of The Cycle of Income Taxa-
tion: first, income is earned; second, taxes are paid
(after any available deductions and credits); and, third,
surplus dollars are reinvested. What does this reinvest-
ment often lead to? Even more taxable income!

Jim and Carol have an annual household income of

$340,000. Carol owns a small business, and Jim is a mar-
keting professional.
While they work with their CPA to try to minimize their
annual tax burden every year they still end up with dollars
that have to be taxed. Usually Jim and Carol try to rein-
vest the after-tax dollars that they don’t need to live on.
Most of their investment options have something in com-
mon—they produce more taxable income! Jim and Carol
feel that they pay a lot to the IRS every year. They don’t
realize that almost all of their assets and income sources While this process of reinvestment can increase
will be taxable during retirement. They hope tax rates your wealth, it is also the same process that drives your
won’t go up. income tax higher and higher, year after year. What if
there was a way to pay taxes on your income one time,
and then to reposition some of your after-tax dollars
outside of this tax cycle, never to be taxed again?