Graduating from Tax-Deferred to Tax-Free

Xtreme 1 Financial – Breaking the Mold of Cookie Cutter Finance – Revealing the Truths of the Industry

Founder of Xtreme 1 Financial, Danny Singson, sets his sights on bringing top 1% knowledge and financial strategies to the marketplace. Singson’s agency is regarded as being the leading agency in providing proven tax-free options and solutions to those who seek ways to keep 30-40% more of their money in their own pockets versus giving it away unnecessarily to Uncle Sam and taxes.  The San Francisco Bay Area-based agency has become exceedingly sought after for its unique and much-needed specialty in “ERFT” (Eliminating Risk, Fees & Taxes) and has established a nationwide reach with its services. Their ERFT specialty focuses on helping people who want to save for their future, retirement, or just want to protect their money without sacrificing on growth.  Most of these outcomes can be achieved with tax-free strategies. 

Upgrading the Status Quo 

Singson delivers enough value in this one article alone to make up for a lifetime of not having any financial education in personal finance. There are a variety of ways consumers attempt to find clarity to plan for their financial futures. Unfortunately, most people fall short of making the right decisions to achieve their desired outcome. For decades consumers who range from novice to savvy find themselves relying on cookie-cutter advice that has been shaped and molded by decades of old and outdated strategies, which only applied to generations of the past.  These were the good old days when people were offered pensions from their employers as incentives for their loyalty and longevity with their employer. These pensions were the proverbial dangling carrot that made picking one job and staying there for 30 years, a completely normal career expectation. Nowadays, most don’t know that they are being sheep-herded into financial products that were never intended for retirement, to begin with, such as the 401k, IRAs, 403b, 457, TSP, and Sep IRAs. 

The Truth About Tax-Deferred Methods

Most people use Taxable instruments like 401ks or similar Tax-Deferred accounts and with the majority of these types of accounts…

  • You’re heavily Taxed typically at the time you need the money the most
  • You generally can NOT touch your money until you’re 59 ½ – And even when you do
  • You’re subject to massive Risk & Volatility – meaning when the market goes down, your money goes down with it… AND 
  • There’s NO GUARANTEE that you’ll even have any MONEY left over when it comes time to access it
  • You have Restrictions and Penalties to even touch your OWN MONEY, so liquid access is a huge problem for many people
  • Every single dollar you pull out of these accounts – You are REQUIRED to report as Taxable Income to the IRS

So everything that you earn and every dollar you take out is not even YOUR business, it’s Uncle Sam’s BUSINESS. He will always have his hand in your pocket NO MATTER WHAT.

Graduating To The Tax-Free Side 

  • You don’t pay Taxes on your Principal or Growth. This is 100% legal and IRS compliant so long as it’s structured and designed properly
  • You Keep 30-40% more of YOUR hard-earned money in your pocket vs giving it away to Uncle Sam
  • You have Guaranteed Principal Protection automatically built in without sacrificing your Growth
  • You have what is commonly called “Uninterrupted Compounding Interest”
  • Your Money is Liquid and can be accessed at any time without Penalties or Restrictions
  • And of course, you are NOT required to report earnings or distributions to the IRS – because it’s not classified as INCOME in the eyes of the IRS …Meaning if in any given year, you were to take out Ten Thousand dollars or even a Half a Million dollars, it will not add to your TAXABLE INCOME -so this remains YOUR business and NO longer Uncle Sam’s Business.

Why You May Not Have Been Taught This

Most of us were never taught money in school and resort to crossing our fingers with a “Hope & Pray” strategy. The most commonly used tax-deferred instruments you’re using at either your job or even as a business owner like 401ks and various types of IRAs  – were never actually really designed FOR retirement, to begin with, and are mainly tax-deferred instruments since the markets could fluctuate and crash and you could lose everything. So most people are gambling on TWO levels – You’re gambling on 1.-Your own money and 2.– You’re gambling on timing in the market. Most don’t need to be reminded of what happened in 2008 right? Everyone’s 401k turned into a 201k almost overnight.

Here’s a quick thirty thousand feet perspective.  There are two sides to finance. There’s the Tax-Free Side and of course, there’s the Tax-Deferred Side. The Tax-Free Side requires a couple of things. A – Personalization and B – actual REAL consultation because there are no actual cookie-cutter scenarios on the Tax-Free side. On the tax-deferred side, it’s quite the opposite. As you might already know, many people, especially if you’re an employee, typically get sheep herded into financial products at their jobs, from HR, or even their own financial advisor and that’s pretty much it. You cross your fingers and at best, you’re subjected to that good old  “Hope & Pray” strategy where you hope you’ll have something significant left over at the end of the day when it comes time for you to retire or even at a time when you simply just want to access your own money in the future. So, if you’re wondering why your financial advisor hasn’t ever informed you about the Tax-Free side of retirement or personal finance or how to properly set up a Tax-Free Retirement account (TFRA), it’s for a few reasons…REASON NUMBER ONE – Most don’t SPECIALIZE in the Tax-Free side of finance and many don’t even know these plans exist. Even if they do, many don’t have the required license and training to even know how to legally & properly set one up. – REASON NUMBER TWO – Most advisors only recommend products that they have contracts with and in most circumstances their number one goal is to gather as many funds under management and attach a fee to it because that’s how they earn income. This is how they can charge you fees regardless of whether or not you earn money or even lose money in the market. Because of this fact, most people lack the proper awareness and education and are never exposed to the Tax-Free side of finance. 

Who You Work With Really Does Matter – Don’t Make The Same Mistake Moving Forward

How much money are you willing to lose in your 401k or IRA? If you are answering honestly, most would say, “Nothing.” If that is the case, here is the question you should ask yourself – Do you see that what you want is NOT congruent with what you have? Time is a dwindling asset and it’s very costly to not be informed when it comes to your money.  

It’s always wise to work with specialists that are experts in this area of personal finance. If you’re working with an advisor or planner who has not brought any of these Tax-Free strategies to the table, you’ve more than likely been sheep herded into a cookie-cutter plan or financial strategy that also certainly does not Eliminate Risk, Fees & of course Taxes. Reach out to the specialists at Xtreme 1 Financial to determine if these strategies apply to you and/or your specific scenario.