When Is It Too Late To Start Saving For Retirement?

It's never too late if you do this. In this episode, I'm going to

address the question "When is it too late to start saving

for retirement?" Get ready because it's never too late. But the

sooner, the better.

So, I'm Doug Andrew. And what do I know? Well, I've authored 11 books so far.

One, I was blessed to have it become a New York times and Wall Street Journal

number one bestseller back in 2007. That was book number 4.

Recently, I released my 11th book and I'm currently ready to release my 12th book.

In all of these publications, I love to educate people like you and answer

questions such as this one. I wish I had a nickel

for every time somebody has asked in an audience or on a webinar or

a live seminar. "Hey, Mr. Andrew,

when is it too late to start saving for retirement?

I'm 50. I'm 60. I'm 70." And I go, "It's never too late." Now, the reason why I

bring up my fourth book, it was titled

The Last Chance Millionaire, okay? It's not too

late to become wealthy. In this book, which again the second week it was

released we were honored, we were blessed that it hit New York

times the Wall Street Journal number one bestseller list.

And here's why. Back then, there were 78 million baby boomers in America. I'm

one of them. And many of these baby boomers were

feeling like, "Golly!" in 2001 to 2003,

they saw their retirement nest eggs traditionally in the market

lose 40 in value after 9-11. If they had a million dollar nest egg in

the market, they saw that million bucks dwindle down

to 600,000 by the end of 2003. It took 4 years

till 2007 to make back what they lost. And so,

they felt like they had lost their future. They had to put off retirement

7 years. Now, in my book, I talk about how people

during that 7-year period doubled their money,

okay? A million doubled to 2 million instead of losing

and barely coming back to break even. In 2008, most Americans saw that nest egg

dwindling value again 40 in one single year because of the

mortgage meltdown, the crisis. And it took until 2012 to get back to

the break-even point of a million. By then,

many of our clients had tripled their money to 3 million

totally tax free. So, it's never too late. But then people started to pay

attention, "How did you do that?" So, in this book, I actually have 4

couples. I use fictitious names to replace the

actual their real names. Because these are real life stories.

4 couples that we helped accumulate an extra million

dollars in 10 short years by repositioning and optimizing

their existing assets. Money that they were not optimizing as well as they

could. And we generated an extra million bucks

in less than 10 years, actually. And that million dollars predictably

generates $100,000 a year of tax-

free income. In other words, we were able to generate 100,000

a year tax-free. Instead of an ira or 401K,

you would have to have a million and a half dollars earning 10%

to generate 150,000 of income you pay tax on a third of it to

net the same 100,000. So, this was remarkable. And we were so

blessed because so many people that read this book

got empowered and I received thank you notes from all over the country. "Thank

you, Mr. Andrew. You gave us hope. Resurrected our

ability to be able to retire." And in 10 short years from age 60 to age

70, from age 55 to age 65. Many people were

70 and they continued to be in motion

adding value and by age 80, they were set. And so, let me explain to

you some of the critical ways that we were able to empower people

even late in life to not give up. Not say, "Oh, it's too late for me."

No. You can do this. And it starts out by having an analysis done of what

assets you already have that you're under utilizing. So, let me give you some

examples. So I've often said "It's not what you

begin with that counts it's what you end up with."

Many times when i would meet with these people in their 50s, 60s, even

70s, I would do an analysis of their existing

portfolio or their existing assets. And maybe they did get clobbered

due to the market volatility and the recessions. The great recession

that we had in the decade from 2000 to 2010 where they

saw their account values dropped 40% in that decade.

And so, that's why we called it the lost decade. But most of our clients had

tripled their money from 2000 to 2012 totally tax-free.

So, people say, "Well, it's too late", right? "No, no. Let me see where you have your

money currently." So, let's say they had a million and it

was now worth 600,000. Most people have the tendency

to wait until the 600,000 that it dropped down to comes back

to the million dollar value. The high water mark they had. They

want to wait until it gets there before they do anything. I go, "No,

no, no, no. You want to get the money out of that instrument while the values are

less." Why? Because you're going to have to pay tax on that sooner or later.

Would you rather pay tax on 600,000 in your tax bracket? Let's say 33%.

Would you rather pay tax of 200,000? Or do you want to wait till it gets back

up to a million and pay tax more like a third of a

million is 333,000. So, you want to pay tax of 200,000 or 330,000.

Well, what difference does that make down

the road? It's because after you get the taxes

over and done with at the lower values at today's lower rates,

you recapture the gain tax-free. You reposition that money tax-free. So,

for many people, we optimize their assets by doing a

strategic rollout. Getting the money out of their yet-to-be

-taxed IRAs or 401K sooner than later. Over a 5-year period most of the time.

We got the taxes over with in today's lower brackets because

most people realize that your current tax bracket

is likely the lowest bracket you will ever

be in. So, why do you want to keep postponing,

deferring, delaying the inevitable? Procrastinating

and then withdraw your money down the road when most people

that I ask say, "Hey, I think future tax rates are going to be higher because of

irresponsible government spending and the printing of

money and bailouts and and all kinds of stimulus packages." We've

seen that with pandemics, with recessions, taxes

aren't going to go anywhere but up over the long haul. So, it behooves

you to get the taxes over and done with. So, many times, I would reposition money

out of their yet-to-be-taxed IRAs or 401Ks that were in the market. I said,

"Let's get it out of the market. Let's put it at an indexed universal

life where it will be tax free from now on."

And let's recapture the gain and not lose next time the market loses,

if you understand indexing. If you don't, you need to watch

those episodes that explain that. Or I'll show you how you can get a

free copy of my book that explains this. And recapture that gain. So, you

reposition maybe money in underperforming yet-to-be-taxed IRAs

and 401Ks. Sometimes people had real estate, they

thought was going to be their retirement. And when i did the analysis, they were

renting the real estate for a measly 2% annual rate of return.

In other words, people in California might have a house, a 5-bedroom house.

They think, "Wow! It's worth 4 million bucks."

And they're renting it out for 10,000 a month and they think that's

good. That's pathetic. There are 5-bedroom

homes in other cities in this country like Memphis and Orlando

that are worth 300,000 and rent out for 1% of the

value a month. 3 grand a month. If that house in California is really

worth 4 million, it ought to be renting for 40 grand a month.

So, sometimes people were under utilizing their current assets.

And so, we would move with a a 1031 exchange and put them into real estate

in other cities. And quadruple their rate of return. But

we wouldn't take the equity and put it in a new property would put that into

their insurance contracts. And the rental income is doing very well.

But we're taking that 4 million dollars which we

did for one couple. They had a home and it was it

was actually a 5 bedroom home. They originally paid 230,000 for.

And about 35 years later, it was worth 4.6 million.

Well, they were able to get a new home for 600,000

in a retirement community in a different state.

And they paid a capital gain tax on some of it.

But they were able to turn around and put 2.6 million

into a max-funded universal life insurance contract,

indexed universal life. And that is generating over 200,000 year of tax-free

income out of 4 million netting 2.6 million after capital gain

tax of lazy idol equity that was trapped in

their house doing zippo for them. See, there's a lot of

assets people have. It could be real estate equity,

it could be money trapped in IRAs and 401Ks. And thinking they can't tap

into it. Because they're going to have to pay tax.

Hello? You're not saving anything waiting. You're delaying the inevitable. Or you

wouldn't believe how many people have a half a million

or a million bucks sitting in a bank earning 1%.

And I go, "What's that doing in the bank at 1%?" "Well, we want

it safe." I said, "Safety of principal or safety of

the institution? Why don't you increase the safety

of the institution by 6 notches higher by putting it where the bank is putting

your money?" They put 30 to 40 of their tier one

assets into legal reserve insurance companies. BOLI,

bank owned life insurance contracts. They borrow our money at 1 and they

earn 5. How much more is 5 than 1? 500%. They make 5

times what they're paying you and they increase the safety by 6 notches

in the safety rankings. And so, when you start

analyzing assets and you go, "Hmm, I can increase the safety and move from 1%

up to 7 or 8, 9,

10 percent?" Yeah, increase the rate of return

the liquidity and the safety with existing assets.

So, a professional, the ones i point my students to,

they look at all your assets. Underperforming,

low-yielding, not as safe vehicles and reposition money in banks credit

unions and underperforming real estate and yet-to--be taxed IRAs and 401Ks, you

name it. And you reposition and put that into something that's going to grow tax-free

from now on. And just like Last Chance Millionaire,

many people within 10 years add another million dollars they would

have never had. But even more important than an extra

million bucks, that million dollars can generate 100,000 a year

of tax free income if they had a million in where they had

it before, they're lucky if it's generating 20 or

30 thousand a year of income. Why not double,

quadruple? Sometimes we have 5 times what people were earning where they had

their money in other assets. That is called asset

optimization. Here's how you can learn more.

So, here's the key takeaways. It's never too late.

But wherever you reposition your assets, you want to increase the liquidity,

the safety, the rate of return and the tax

benefits. That's called the laser test. You want to

embrace and utilize the three marvels of wealth accumulation.

Compound interest, number 1. Tax-free accumulation of your money, number 2.

And then safe positive leverage. You want the ability to own

and control assets with very little or none

of your own money tied up or at risk in that asset.

Where can you learn about those marvels or miracles and the laser test?

It's in my book the laser fund. Now, this book retails for 20 bucks.

I want to gift you a free copy. It's a 300 page book containing all

kinds of charts and graphs and explanations and 62 actual client

stories. The book is 20 retail. I will gift it to

you free. You just go to to

claim your free copy by paying $5.95 shipping

and handling. I'll pay for the book, you pay for the shipping.

There's also options to get the audio and also

videos that will help you understand these concepts.

It can make the difference of having 20 or 30 thousand a year of income

versus $100,000 a year of income in less than 10

years. It's not too late for you.