EXTRA! EXTRA! READ ALL ABOUT THEM! Read about what? Read about “THEM!”So you may be asking “who are them?” They are two incredibly and impressive tax free retirement vehicles. I mean with these two guys you don’t pay a dime of taxes in retirement. I can’t believe it…it’s astonishing, unbelievable, and outlandish! They are known as Roth IRA and Equity Index Life Insurance (EIUL)and/or the sister, Variable Universal Life (VUL).After long nights and forfeited weekends dedicated to researching various types of retirement vehicles, I have, alas, discovered the financial industry secrets. The Roth IRA is quite popular. The Roth IRA is nothing new. Many of you already know that you need to be 59 1/2 years old to withdraw.  There are other benefit to a Roth IRA; however, for the purpose of this blog, I will brush the surface (my next blog will be on how a Roth IRA works and the 2010 conversion). Just know you don’t pay taxes in retirement.  Generally, you’d have to qualify for this IRA.  If your modified adjusted gross income was between the phaseout limits of $105,000 to  $120,000 for single filers or $167,000 to $177,000 for joint filers, you would qualify to contribute to a Roth IRA. But, the rules have changed for this year. Some of you may be aware. Only this year, you can convert (and only convert) your Traditional IRA to a Roth IRA and not incur any penalties.  The IRS has done away with the income limitations. Of course, taxes will have to be paid. The IRS provision has allowed for you to pay 50% of the taxes in 2011 and the other 50% in 2012.  I can only imagine the vast majority of people will do the conversion.  The Roth IRA has made a name for itself.EIUL/VUL is making waves in the financial industry.  They are quite powerful when used appropriately.  Yes, they are life insurance. But the beauty of it all is you don’t pay taxes on the withdrawals.  Because they are distributed as a loan. Do you have to pay it back?  Well, if it’s overfunded (meaning you pay more than the minimum) then you won’t have to because there should be enough funds to cover the cost of the life insurance.  But I will not get into it all right now.  Just brushing the surface for this blog. But look out, because my next two blogs there will be information on this. Continuing on, they provide the convenience of life insurance and retirement. You have the flexibility to change the premium.  An EIUL is linked to an index, typically, the S&P 500 index. Your money is not invested in the market, but linked to the performance of the S&P 500.  There is a guaranteed rate, but will differ depending on the company you choose.  So, if the market doesn’t perform, you will, at least, have a guaranteed rate. The older sister, VUL, allows you to choose your investments. Plus, you have the flexibility to control and change your investments at anytime. These are great tax shelter vechicles.  There are no income limitations. In addition, there is not an age limitation to withdraw the funds.  Whereas the Roth IRA is considered retirement income, the money you withdraw from a EIUL/VUL is not considered retirement income and it’s tax free money!Understand  both are for long-term financial planning. Especially, the EIUL/VUL…these are not short-term vechicles.   In today’s financial world when taxes are increasing it’s critical you prepare for your future.  And what could be a third of your life without a paycheck, it will be nice to know you don’t have to pay taxes from these retirement vechicles.  Especially, when we cannot predict our tax bracket  for retirement that seems to be lightyears away.

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