Family Office Services

Tax-Efficient Insurance Example

Clients want fixed income investments that grow tax-efficiently. As shown on the table, $500,000 invested at 8% can grow to $5,000,000 over 30 years if taxes are managed. If, however, clients invest like most investors, they have just $250,000 of $500,000 of earnings to invest after state and federal taxes, as shown in row 2 of 4 on the following table. In fact, the situation is worse because most people pay taxes on investment income, as shown on row 3 of 4, and most investors pay taxes on distributions, as shown on row 4 or 4. Instead of turning $500,000 of income into $5 million, a typical investor might grow this money to just $662,287 over 30 years. The white paper at offers a solution so that $500,000 can once again grow to $5 million. Tax and investment planning for this extra $4,000,000 should cost less than 1/10th of the benefits.