Originally Posted by
O R C A
“It’s a proprietary formula. I can’t go into great detail” Bernard Madoff
If I just blow this money think it was a bad return? It concerns me how many think they pay zero taxes on this money talking about being 35% ahead from the start.
We have some pilots with questionable understanding of the tax codes. We also have some that like feeding their ego with a large account balance despite the future tax liability.
There are several cases where there is validity in the tax savings. The first one is 100% tax savings.
-As part of an estate plan that includes charitible giving, the 35% upfront savings on MBCBP is a guaranteed return. The net effect is zero income taxes for every dollar invested and grown.
-If the estate plan includes leaving the account to an heir in a lower tax bracket, it represents immediate savings along with reduced taxation at withdrawal.
-For pilots planning on retiring in a lower tax bracket and/or a lower tax state, they have kicked the can down the road in expectation of paying less in the future.