A while back, an acquaintance told me: “I don’t put my money in a bank where it earns no interest. I put it in life insurance, where it has the stability of a bank but earns 5%. I then leverage my life insurance policy to invest in other assets that make my wealth grow even faster.”
How do you make life insurance act as a bank (or cash) equivalent, while borrowing against it to invest in risky assets? And is there a downside to this?
Most people know what life insurance is. But they tend to think of it as term life: fixed payments for 20-30 years that pay out a death benefit if you die before the term is up (while paying nothing if you outlive it).
There’s another type of life insurance called permanent life insurance. It never expires. The most common type is whole life insurance.
Whole life insurance can get very complicated, so I invited a financial planning veteran with extensive experience in it (not affiliated with any insurance company) to share insight on how it works.
This week, I talk with Eric Brotman, CEO of BFG Financial Advisors, a wealth management consultancy, about the intricacies of whole life insurance: who it’s best suited for, its tax and estate planning benefits, and how to use it for investing purposes.
What you’ll learn:
- How a policy his parents bought for him at 14 which he inherited at 24 got him hooked on whole life insurance
- The main tax advantages of whole life
- How whole life is used for estate planning
- The type of securities life insurance companies invest in
- How to choose a whole life insurance company
- How life insurance broker commissions work (and how much they are)
- What paid-up additions are and why they matter
- How to borrow against your whole life policy
- The tradeoffs of borrowing from vs. against your policy
- How whole life can supplement social security in retirement
If you have whole life insurance, are you satisfied with it? Why or why not? If you borrow against your life insurance to invest in other assets, what do you invest in? Let me know by leaving a comment.
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Links mentioned in this episode:
- Brotman Financial Group
- Don’t Retire…Graduate Podcast
- HYW private Facebook community
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Andrew Chen 01:22
My guest today is Eric Brotman who is the CEO of BFG Financial Advisors, a wealth management consultancy. Eric has over 25 years of experience in the financial planning industry and serves on the board of trustees for the Maryland State Retirement and Pension System.
He’s the host of the podcast “Don’t Retire…Graduate” and the author of a book bearing the same name which will be published in September 2020. Both of which are guides to retirement planning.
Eric’s work has been featured in Forbes, the Wall Street Journal, and Yahoo Finance, among other publications. And he speaks regularly on the topics related to financial and retirement planning and wealth management.
I invited Eric to the podcast today to share insights about the intricacies of whole life insurance, which he deals with in his practice because whole life insurance, while not being the right choice for everyone, can have a dual purpose, serving as both life insurance and a wealth preservation and tax planning vehicle.
Eric, thanks so much for joining us today to share your knowledge and insights on this.
Eric Brotman 02:18
Andrew, it’s great to be here. Thanks for having me.
Andrew Chen 02:20
All right. I’d love to start with just a little bit of your personal background. If I understand correctly, I checked out another podcast that you had given on the BiggerPockets Money Podcast, and I understand your first experience with whole life insurance was when your parents bought you a whole life policy when you were 14, then transferred it to you when you were 24.
I’d love to just better understand, what did you end up doing with that policy and what were some of the key insights you learned from that?
Eric Brotman 02:48
You’re absolutely right. My folks had the good insight to get the whole life insurance for myself and for my younger brother when we were kids.
The whole life policy that I functionally took over in my early 20s, I took over the premiums for it. I was working and that was fine. But I used that whole life insurance policy to create greater wealth for myself on multiple occasions during my lifetime.
Clearly, there’s been no death claim. I’m here. I’m well.
But I have used the policy a number of times. I used the cash value in the policy for the down payment on my first home.
In the mid-‘90s, when I wanted to have a down payment on a home, I used that collateral, used the whole life policy, subsequently paid it back, but I sold that home at a significant profit in 2007. So I consider that that whole life created some additional wealth for me.
Then in 2003, I started BFG. When I started the company, no banks would lend me money. They wanted nothing to do with me.
I had no P&L. I had no corporate tax returns. I had no proof that this was going to be successful.
Banks wouldn’t talk to me, so I borrowed money from everywhere. I borrowed money against my home. I borrowed money against credit cards.
I borrowed money out of my life insurance policy. I borrowed money from my mom.
It was just doing the things we had to do. And of course, I will say that I paid Mom back first, because of all the places I wanted to keep good credit, that was the first place.
But the whole life policy was invaluable to me because I was able to get access to capital not only without tax ramifications, but without giving up the upside of the growth in the contract, which I thought was terrific. And I’ve subsequently paid that back and it’s now collateral.
I own life insurance in the same way on my own daughter. She’s 10 years old, and it’s paid for for life. There are no further premiums.
When I turn that over to her, whether it’s a graduation present or a wedding present or something that happens because of my death, she’ll have an asset that will grow forever that will be tax-free forever. And she’ll have the ability to use that in her own lifetime.
Andrew Chen 04:54
That’s excellent. I want to probe into some of the strategies that you found and were able to use successfully here in a moment.
But just to help our audience level set a little bit better, when it comes to term life versus whole life, a lot of my listeners probably know the basics, namely that term, inexpensive level premiums for the duration of the policy, but no guaranteed benefit. You get nothing if you outlive the policy, so you’re really buying peace of mind with that.
Whole life, rather broadly defined since there’s few different types of it, much more expensive premiums but guaranteed death benefit. There’s no term when it expires. There’s also a cash value component that is fairly guaranteed return that usually has a lower bound, something like 2%, and also an upper bound realistically.
And they’ve probably heard the mantra “Buy term. Invest the difference.”
For what kind of people does whole life actually make sense? What are the markers of someone who would actually benefit from whole life?
Eric Brotman 05:50
Andrew, it’s a good question. I think it’s actually a two-part question. If I can take the beginning part first, I don’t want to say anything nasty or terrible about term insurance.
I own term insurance. There are reasons for it. So this is not an either/or.
Term insurance serves a purpose. It serves business purposes. It serves catastrophic death purposes. If you have infants and you’re trying to make your budget work, term insurance makes a huge difference if something happens to you.
So this is not an either/or. It’s an and.
Folks who should own whole life insurance, in my opinion, are folks who have significant income tax concerns. They’re folks who have already hit their targeted retirement savings rate.
It doesn’t mean they’re already financially independent. It means that they’ve done a financial plan and they know that they need to put away 18% of what they make.
I’m pulling that number out of the sky. It’s different for everyone.
But they’re putting away the 18% they need. Now they have additional wherewithal and this becomes something that you can do on top of that.
I wouldn’t necessarily take away from the other things you’re doing. Don’t stop funding your 401(k) or Roth IRAs or health savings accounts or forego 529 plans.
Whole life insurance is an accretive thing. It’s an additional thing.
Now, what I will say is when folks start to build big portfolios, particularly non-qualified portfolios, there are only certain ways to protect yourself against taxation.
One of them, of course, is municipal bonds where folks will say, “I’ll be in a tax-free bond, so I can avoid some income tax.” But in some ways, they’re avoiding income too because the rates are so terrible right now.
But what whole life insurance does is it becomes part of the cash equivalent, part of the safe portion of a portfolio. So we actually use it as an asset class in a model where it is similar to a money market or a short term bond or a TIP or all the various types of things that you can hold that have some liquidity.
Now, I look at it not as short term immediate access. It is collateral, but it takes some time to build it to where there’s meaningful cash value in it.
You’re not going to buy this and the next day borrow from it. That’s not how it works. You have to build it over time.
But we found that contracts, particularly those contracts that are short pay or those contracts where you have a limited number of payments but have coverage for life, are equivalent to doing a 10-year mortgage instead of having an eternal rent payment.
Term insurance is rent. You can rent this place (call it the apartment) for 10 years or 15 or 20 or 30. But when that’s over, you’ve got to move.
You no longer have the apartment and you have no equity for it. You have nothing to show for it. Now, it housed you for that period of time, but then you have nothing to show for it.
But with whole life, you’re essentially paying it down like you pay down a mortgage and then you own it. You can do lots of various things with it.
It’s the most tax-favored vehicle on the planet. I consider it similar to a Roth IRA with no contribution limit and with a death benefit. From a tax purpose, that’s what it’s like.
Andrew Chen 08:57
You mentioned a moment ago that you don’t view it as an either/or. It’s an and. So it doesn’t come at the expense of contributing to your retirement accounts or putting away for retirement in general.
Where in the stack rank would you advise the typical profile of a person for whom whole life insurance is actually suitable? Where in the stack rank should they put that in terms of their asset allocation?
Do they do all their retirement stuff first, all their financial independent stuff first, and then life insurance? Or does it get blended in along the way?
Eric Brotman 09:38
I think it can get blended in along the way. It certainly depends on the situation. It depends on age and health and lots of factors.
But I think the very first thing that we tell our clients to do is to make sure there’s no adverse debt. You can’t build your castle before you’ve dug the moat, but you also can’t get out a hole without stopping the digging process. So first get out of adverse debt.
You want to make sure you’re contributing to your retirement plan, particularly if there’s a match. You take the free money.
If your employer is matching to 3%, 4%, 5%, or 6%, make sure you at least take that. It’s foolish to leave that on the table.
The other thing that I think would come before whole life most of the time is HSAs. Health savings accounts are really underutilized, under-understood, and incredibly powerful. And people confuse them with flexible spending accounts and other things.
But getting to the employer match and making sure you’ve got your HSA contribution, because that truly is the perfect tax vehicle on lots of levels, I think that generally comes first. Beyond that, your contribution to a whole life contract is part of your savings rate. If your target is to save 18% or 20% or 17%, whatever it is, whole life premiums can be a portion of that.
You do have to adjust for your return expectations because, to your point, whole life is not designed for growth as much as it’s designed to plot along. It’s like the tortoise and the hare. Every time I hear it, the tortoise wins.
But you’re not going to get a 7% return on whole life insurance. What you will get is you will get an eternal return. You will get typically about a 10-year period where you’re paying the mortality expenses and you’re getting very little return on your cash.
The cash is there. It’s becoming a sinking fund for you, but it’s not really growing a whole lot.
Beyond that 10-year mark, you can see 4%, 5%, and 5.5% returns, but you have to pay the piper and do those first couple of years. It’s almost like your equity in your home is going to grow whether you have a mortgage or not, but it will sure feel better if there’s no mortgage and the equity is growing than if it’s just a piece of the pie.
Andrew Chen 11:50
At what income or wealth level, in your experience, does it make sense to consider whole life? You mentioned this is typically for people for whom tax planning is actually a thing.
Eric Brotman 12:02
Yeah. I certainly don’t think it’s for everyone. And mostly it’s because of the illiquidity and the inflexibility.
If you’re living paycheck to paycheck, you should not be signing up for anything that’s contractual that you must make a payment to. You’re much better off funding an account that, if times get tough, you can stop funding. So you have to have the emergency fund first.
I don’t know that it’s based on income as much as it’s based on lifestyle because there are folks in Iowa making $100,000 who look like royalty and folks in San Francisco making $100,000 who look like poverty. So it just depends where you are. I don’t think it’s income level as much as a positive cash flow level for your household.
If you’re predictably making more than you spend, which is a great start, and you’re growing wealth and you’re making good decisions with that which you make more than you spend, then it starts to look like a good strategy. And I don’t see a lot of this strategy used for people who aren’t married.
For example, I think it’s a great way to preserve insurability for your children, and we can talk about that. I also think it’s great for married people as a pension replacement or a Social Security replacement tool.
What a lot of times couples don’t think about when they’re exploring their own retirement, they look at “We’re each going to have a Social Security payment,” which we can talk about whether that may or may not be true in 20 or 30 years, but let’s assume it is. Let’s assume both spouses or both partners get a Social Security payment.
When one of them is widowed, they are going to lose the smaller of the two payments. So there is an absolute guarantee of a pay cut when one of you is widowed.
Now, some would argue, “Yes, but my expenses will go down.” Maybe they will or maybe you’ll need more expenses because you need somebody to help care for you in a different way or because you want to travel to see your grandkids more because you’re living alone or whatever it is.
So I think the assumption is there will be a pay cut. What assets will you suddenly be able to access to handle that pay cut? And whole life insurance is the ideal solution for that.
Here’s how that would work. Let’s say that your Social Security between two spouses is $20,000 a year, hypothetically.
That $20,000 a year is $40,000 between you. When one of you passes away, it’s now $20,000. Where do you get $20,000 in a potentially perpetual way?
Because if you lose a spouse at 68 and you live to 106, you’re not going to want something you’re spending down. You’re going to want something that will not only provide ongoing wealth for you, but something that will keep up with inflation because life is going to get more expensive too.
So what you need ultimately is about half a million dollars because $500,000 with a 4% withdrawal, which is not magical but it’s a reasonable barometer, is $20,000 a year.
If you need $500,000, there’s a couple of ways to get it. You can invest that money over your lifetime and park it and plan not to use it until there’s a widowhood. It’s an option.
You can also use term insurance for a period of time or you can use universal life insurance or something that’s purely death benefit that you can’t access during your lifetime but that you can access when somebody dies. It’s an option.
I think whole life is the best option for that. And the reason that I believe that is that let’s say husband dies, wife is still alive and well, wife collects one Social Security payment and not the other. Wife in that situation gets to use the death benefit from the husband’s policy, but also now has a permission slip to start utilizing the cash value in her own policy for part of her income.
The reason that’s important is that she no longer has somebody she’s going to widow when she dies. You don’t need half a million dollars of life insurance. You might only need $300,000 or $350,000 because you’ll get the death benefit from one, the cash value from the other, you’ll close the gap, and you’ll still leave something behind to your children, if that’s important to you.
Andrew Chen 15:57
In that scenario, what do you say to clients or people who are in a similar scenario as you described to make sure they’re not “overfunding” retirement?
Because even if husband dies, cutting off the lower of the two Social Security payments, if there’s a death benefit that accrues, it might be enough for wife to fund the remaining years, or it might not be.
But if they had a $500,000 pot just like you were describing, they may not need it to exist at the second spouse’s (wife’s) death. They could just amortize that down as well to nothing. You can’t take it when you die anyway.
I was curious how you advise clients on how to make these tradeoffs between funding enough but not working unnecessarily more years that results in overfunding.
Eric Brotman 17:08
Your point is a great one because there are lots of different ways to feel poor. You’ve heard house poor, insurance poor. You could be retirement poor.
I do think you have to live your life. If you wait for a rainy day, you may never enjoy it. So let’s start with that.
Generally, I don’t think there is an overfunding problem in most cases. And the reason that I say that is there’s so many unknowns.
There are unknowns about your health. There are unknowns about your longevity.
There are unknowns about inflation. There are unknowns about tax rates.
I get the sense that, while the perfect 4% plan that I’ve described sounds great, it only sounds great if the seas are calm.
If we’re in the ‘80s and we have high inflation or if the stimulus packages create much higher taxation or capital gains rates no longer get favored treatment and they become ordinary rates or you live to be 105 years old, I think it’s important for people when they retire to realize a couple of things.
One, they are likely to live longer than they ever imagined. We tend to tie our mortality to how old our parents were. That’s not necessarily a fair barometer.
It may make a difference, but it’s not a fair barometer. You’re going to live longer than you expect. Life is going to be more expensive than you realize.
Think about the things, Andrew, that you pay for every month that 10 years ago you didn’t or 20 years ago you didn’t because they didn’t exist. Think about the technology, the innovation. You’re in the perfect spot to talk about that.
Think about the ways in which our monthly budgets have adjusted for things that we now consider to be critical that hadn’t even been invented yet. And think what could be coming down the pike as a quality of life, as keeping up with the speed of the economy or the world.
It’s perfectly fine right now if grandma decides she doesn’t want the internet because she doesn’t want that bill, but she won’t be able to do very much. That’s not really what happens. What happens is you wind up spending money on things that you didn’t realize you’d be spending money on.
And to me, the big iceberg is healthcare. If you have a good long term care plan, and it doesn’t have to be insurance, it could just be that you have a good health plan with HSAs or retiree medical or you’ve set aside a sinking fund for that or however you want to do it. If you have a good plan in the event you get sick, that will be a huge determinant into your long term success financially.
Andrew Chen 19:33
Can you describe what the tax benefits are of whole life in a little bit more detail? For folks who are not as tax-savvy, what specifically are the tax advantages? How do they work in whole life insurance?
Eric Brotman 19:49
First and foremost, whole life insurance is not tax deductible. Unlike a traditional IRA or a 401(k) where you can get a tax deduction for your deposit, this is not a deductible expense.
That said, your cash value grows in the policy and it grows every year. And that does not throw off a 1099, so there’s no capital gain. There’s no unrealized gains in the contract as long as you maintain it.
Let’s say you’ve built a $100,000 war chest in cash and you decide you want to use it. There are several ways to do that.
One is you could surrender the policy entirely and just take the money. That becomes a taxable event potentially and at an ordinary tax rate.
The one thing you never want to do is surrender a contract. There are ways to reduce it. There are ways to adjust it.
But don’t ever surrender it because most of the time, you will get clobbered. So that’s one.
Assuming you don’t surrender, there are ways to access it. One is to make withdrawals from what are called paid up additions in the contract.
In other words, if you buy a $250,000 whole life policy and you fund it for 30 years, the benefit is going to be more than $250,000 if you’ve taken those dividends every year and bought more insurance with them.
You have the ability to make withdrawals. Those are paid up additions, so you can make withdrawals. And those are tax-free as long as you don’t surrender the contract.
You can also use the policy as collateral, which I think is the better way to do it because think about this. Let’s say you had a quarter-million dollars in the bank and you were earning 3% on that account. We know that’s pie in the sky right now, but let’s say you were.
You’re earning 3% on your quarter-million dollars and you went to your banker and said, “I want to spend $200,000 of this. But what I’d like to do is I’d like you to keep giving me interest on the whole $250,000 because it was there before, but I’m going to go spend $200,000 of it.” The banker would laugh you out of their office.
With life insurance, what you can do, more similar to a home, is you can get a line of credit. It’s called a cash value line of credit or CV LOC, which is very similar to a home equity line of credit.
The way it works is you actually use the policy as collateral so that you can utilize the money, typically interest only, typically low rate, and you can utilize the money while still gaining the 3%, 4%, or 5% interest on the full balance. So it sometimes can wind up being very accretive.
Now, all life insurance policies, all whole life policies have a stated interest rate. You’re allowed to borrow directly from the insurance company. The stated rate most of the time is around 8%.
Before you say, “Forget it. That’s lousy,” remember that if you’re paying 8% on that loan but you’re earning 5% on the underlying asset, your net cost is actually quite low as long you don’t surrender it and you don’t pay taxes on it.
Done right, you’ll never pay taxes, ordinary income or capital gains or any taxes on anything that’s in the policy while you’re alive. And the death benefit is income tax-free to the beneficiaries, no matter who they are.
Unlike, for example, an IRA where you take a tax deduction and you get deferral along the way, but then when you make withdrawals, you pay ordinary income tax. And if you die, it goes to your heirs, and your heirs only have 10 years now to drain the whole account.
Their income tax bill could be a heck of a lot higher just by virtue of the fact that you’ve built your whole retirement and they only have 10 years to drain it and it’s at their tax rate.
So if you’re 80 and your kids are 50 and they’re in high-earning years, the IRA you leave behind might be taxed a heck of a lot more to them than it would have been to you. That’s terrible tax planning.
With a Roth IRA, of course, you use after-tax dollars, you grow them tax-free, and then you make withdrawals tax-free. That’s terrific, but there are all kinds of age restrictions on them and there’s contribution limits. If you’re going to only put $6000 or $6500 a year away, that’s not a huge amount of money.
So you have a very limited amount of money. It’s capped based on your income. There are ways around that, but it’s capped based on your income.
You have to be 59 and a half to touch it. And when you die, your heirs get 10 years to drain it. So they’re only going to get that tax deferral for so long.
I’d much rather see a tax-free death benefit that’s greater than the cash value that does not create any type of income tax. In some ways, it is the perfect vehicle.
I would argue the only thing more powerful than whole life insurance for most folks is health savings accounts. It’s the only one that’s more powerful, in my opinion.
Andrew Chen 24:14
You mentioned a moment ago that there’s different ways you can access the value in your whole life policy when you want to spend it down. One of those is you can open a cash value line of credit that is interest only, so you’re not paying any principal during the term.
I was curious, when you compare that option versus borrowing directly from your whole life policy where the rate is more or less 8%, how do the two rates compare? Is it cheaper to take out a line of credit?
Also related to that, can you take out a line of credit against the entire amount, or is there a haircut that’s applied, some lower percentage amount?
Eric Brotman 25:03
I love three-part questions. Let me try and get all of that down.
First of all, loan-to-value is typically 95%. Unlike an investment account loan that might be capped or a marginal that might be capped at 50% or so based on your underlying assets, or a home equity line that might be capped at 80%, cash value line is usually capped at 95%, which is significant.
The second thing is typically these are based on prime rate. In an environment like today where rates are low, you might be able to do the cash value line of credit at 4%, which is better than the 8%.
If you borrow on a cash value line and then we get a spike in inflation and prime rate goes to 12%, all you do is pay off the line of credit with a direct loan from the insurance company, so you’re still capped at 8%. Essentially, you can have a lower rate than 8% but never a higher one. That to me feels pretty good, especially if interest rates are back at 12%.
The house I grew up in, we financed at almost 15%. It’s like buying a house on a Visa card, which is nuts. But if interest rates are back in that neighborhood ever, 12%, 13%, 15%, anything you can borrow even at 8% makes you feel like a superstar.
I think you have the opportunity to use the line of credit during a low interest rate environment, but you have the ability to borrow directly as collateral from the insurance company with about 95% loan-to-value in a high rate environment. Did I hit all three?
Andrew Chen 26:31
Yeah, I think so.
I suppose there hasn’t been a recent time when it would make sense in that case to borrow directly from your policy as opposed to borrowing it from a bank against your policy. Is that correct?
Eric Brotman 26:45
It is, although it’s funny because people approach us and become clients of ours and a lot of them have some type of whole life insurance and they have loans against them, and they have no idea that we can cut their interest rate in half with no fee or cost whatsoever in 10 days.
So we become heroes right away because whatever they were paying, it’s just been cut dramatically because of what interest rates are.
People don’t know these things exist. And the insurance companies aren’t telling you because they want you to borrow from them because then they’re making the money. They’re not going to say, “Hey, there’s a cheaper option out there.”
That’s one of the reasons why advisors who work for insurance companies sometimes could be a little iffy. We don’t work for any insurance company. In fact, I mostly loathe insurance companies.
I tend to distrust them like everyone else. I consider them necessary evils. That said, let’s find the ones that we can feel the most confident in.
I know you’re going to want to talk about how do we choose an insurer, and we can talk about that at length, but there’s a lot of fear or distrust of large financial institutions. Insurance companies are not only no exception. They might be at the top of the list for folks too.
Andrew Chen 27:57
I definitely want to probe on what to look for when you look for an insurance company here in a moment. But I want to close out some of the tax-related considerations that folks should keep in mind.
One question I had is when financial advisors say that whole life can help particularly high net worth individuals with estate planning, what exactly do they mean?
How exactly is whole life used for estate planning? And how large of an estate do you need before you start to get real mileage out of a whole life policy for estate planning purposes?
Eric Brotman 28:31
It’s funny. I don’t use whole life for estate planning very often because a lot of the benefit to whole life is the control that you have and the ability to use your own money.
Inherently, if you’re trying to do estate planning, it means getting money out of your control, which defeats one of the primary purposes of whole life insurance.
There are life insurance solutions for estate planning, and there are lots of them, but I rarely use whole life for that purpose. If I am going to use whole life for that purpose, it’s part of a gifting strategy.
At that point, the idea is grandma or grandpa are paying premiums for their kids’ and their grandkids’ whole life policies. And they are gifts only to the extent if their kids or grandkids own the policies.
If grandma and grandpa own them, there’s no gift tax. There’s no gift whatsoever. They still own them.
The good news there is that at their death, the death benefit isn’t taxable by the estate. Only the cash value is. So it’s a little bit of a tax savings.
The better way to do it, frankly, if you really have an estate large enough that you’re concerned, or if you live in a state where estate or inheritance taxes are particularly high, if you’re going to do this, gift the premiums every year and allow your kids or grandkids to own them themselves so that there’s absolutely no clawback to you whatsoever.
There are better strategies for amplifying an estate than whole life insurance, but whole life can help if it’s part of a gifting strategy for multigenerational planning.
Andrew Chen 29:56
That’s interesting. Given that the current lifetime estate tax exemption is almost $12 million, I understand that the death benefit for any insurance policy is income tax-free, so you could gift the premiums, as you said, but most people are not going to die with $12 million of assets.
Eric Brotman 30:15
It’s a true story.
Andrew Chen 30:16
Most everything you leave to your heirs, whether it’s real estate or a mutual fund, is going to be tax-free anyway. So one question that folks, my audience, might be fairly thinking about is in what scenarios could it be advantageous to introduce life insurance for estate planning, given that you have this really high estate planning allowance anyway?
Eric Brotman 30:46
Great question. First of all, the estate planning exemption, the unified credit amount has a sunset provision on it in a few years. In the absence of action by Congress, and we can talk about whether Congress acts anyway, the exemption will drop again significantly.
There are also states that are strapped for cash, and going after the perceived wealthy estates is low-hanging fruit. It’s very easy politically to go after that.
I think right now, we’re in an environment where there are some very friendly tax provisions to very wealthy people. I can’t fathom that’s going to continue simply because there’s a need to close revenue gaps. Revenue being a funny word for taxes.
But nonetheless, there are revenue gaps that need to be closed, and it would be politically expedient and easy to go after those kinds of folks.
There are still states where the exemption is only a million dollars. And if you have a house and a 401(k) and a life insurance policy, you’re going to be over that million dollars very quickly because it’s the death benefit, not the cash value.
Even a term policy, if you have a $3 million term policy and you’re 40 years old and you’re paying $1000 a year for it, it’s costing you not a lot of money, but when you die, that $3 million will create estate taxes (at the state level) to someone.
If you’re married and you name your spouse, it will be postponed because there’s no estate tax at the death of a first spouse. But ultimately, those assets are going to roll downhill. And when they do, they will be taxable at the estate level at the state.
So I think it’s really important. There are only two states in the country that have both estate and inheritance taxes. That’s New Jersey and Maryland.
Some have none at all. If you’re going to die, die in Florida. It’s God’s waiting room anyway.
They’ve been joking about that for a long time. But part of that is because of taxes. Part of it is weather, I guess.
But there are ways to game the tax system, significant ones both on an income standpoint and an estate standpoint. But I think it’s unrealistic to expect that these exemptions are going to stay because it’s way too small a percentage of the population.
And to take that from $12 million to $2 million would still impact such a small percentage of the population in a way that they would plan. I’d be shocked if that’s not reality within the next decade.
Andrew Chen 33:11
I think I heard a moment ago, you mentioned that a death benefit on term life policy in your example, it might be taxable at the estate level once it’s paid out. But wouldn’t that be true also with a whole life policy?
Eric Brotman 33:23
Andrew Chen 33:23
Both policies are going to be tax-free certainly at the federal level? Maybe there are some states that are particularly aggressive at collecting estate taxes at the state level. But aren’t all life insurance payouts all tax-free anyway?
Eric Brotman 33:42
They’re all income tax-free. But if the death benefit is controlled and the policy is owned by the decedent, it is includable in the decedent’s estate.
In the example I gave, the $3 million, very few people have $3 million of whole life insurance because you’re talking about an $80,000 annual commitment. There are people out there who do that. Plenty of them, but it’s a very small minority.
Most folks, if they have that kind of death benefit, the reason I use the term example and I use the young person is in the event of an accident, there’s suddenly this big windfall financially in the form of term insurance. There’s no income tax on that.
But now you have a taxable estate and you have a widow or widower or kids trying to figure all of this tax regime out at a point in time where they’ve just lost a parent or a loved one. It’s not pretty and the state is just waiting for the second one to die like a vulture.
We have to remember that, yes, life insurance is income tax-free. It is most certainly not estate tax-free. And depending where you live, that makes a very big difference.
Andrew Chen 34:46
So if the decedent, just to roll with that example, who has a $3 million policy dies and the beneficiary is the child in this case, that transfers over tax-free. I just want to make sure I understand. At what point do estate taxes trigger in that case?
Eric Brotman 35:08
Right away. If you leave a policy to someone other than your spouse, there’s no income tax. But that is part of your taxable estate, and your estate may not have enough money to pay the taxes.
And there come lots of issues there because you’ve named a beneficiary on the life insurance. You’ve left them a lot of money, but let’s say the state wants $400,000. They could take the house to do that because you’ve left the dollars in another way, or you’d have to utilize some of those dollars to buy the house.
It really is messy. And it happens more often than not in high tax states with term insurance because people aren’t really thinking of it that way.
If you’re buying whole life insurance, typically you’re savvy enough to understand that there are tax ramifications and there’s some real planning going on. People don’t wake up one morning and go, “I think I’m going to buy some whole life insurance.” It just doesn’t happen.
Families recognize that they need insurance for lots of different things. But very rarely does somebody wake up or somebody makes a phone call and says, “I’d really like some whole life insurance. Can you help with that?”
It’s shockingly rare. Most of the time, whole life insurance is introduced as a strategy by an estate attorney or an accountant or a financial adviser because there’s some reason why that family will benefit from it. But it’s shockingly rare for someone to wake up one morning and say, “Yeah, I think we should do that.”
Andrew Chen 36:24
So just to synthesize here, if I’m understanding correctly, it sounds like there would be potential tax risks for a high value policy not on an income tax basis. That’s tax-free, both at the federal level and the state level.
At the federal level, that’s not really going to impact many people because the exemption is so high. Even if you cut it in half after the sunset provisions, it’s still $6 million. Most people aren’t going to die with that much money.
But at the state level, I understand that there are some states that have quite low estate tax thresholds. In those scenarios, if you live in one of those states, die in one of those states, have a high value policy, it’s that scenario, that combination of facts that could trigger the tax risks that we’re talking about. Is that correct?
Eric Brotman 37:15
That’s 100% right. And the solutions that are used by estate attorneys and by financial advisors and by insurance agents most of the time involve wealth replacement trusts. They involve some type of insurance that’s owned by and payable to a trust that is not controlled by the insured.
There are things called irrevocable life insurance trusts that have been used many times over the years by families trying to avoid that legally. There’s a legal set of gifting rules and other things.
At the end of the day, those are things that are possible, but you need to do some strategic and savvy planning. You can’t just gift something to the trust in contemplation of your death. There’s a three-year lookback period.
There are lots of rules involved and you need an attorney to draft it. You start getting into higher expenses to set those up, greater complexity to make sure they happen properly every year. And that’s where you really need advice.
But if you’re in a high tax state and you’re looking to own significant life insurance for whatever reason, whether it’s income replacement or Social Security or business purposes or anything at all, it’s real important to get the right advice legally and from a tax perspective and from a financial perspective.
Andrew Chen 38:27
What kind of securities do insurance companies that sell whole life invest those premiums in?
Couldn’t ordinary retail investors like you and me just go and invest in the same thing, generally the same stable quasi-guaranteed returns that whole life insurance companies promise but without the high inherent upfront costs that whole life incurs?
This is a little bit of a leading question because I know the answer is not that simple, because if it was, then people would be doing it. So I’d just love to get your take on it.
For people who are thinking that they’ll just sidestep that, why is it not so simple? Why does it not work that way?
Eric Brotman 39:17
There’s a number of reasons. First of all, the underlying investments usually are fixed income instruments. They’re usually ladder bonds. For many years, they were heavy on collateralized mortgage obligations.
We all know what happened in 2008. That wasn’t real pretty.
And those underlying securities, there’s very little stock exposure or equity exposure in the general account of a life insurance policy that is backing those whole lifes. So you’re looking at a pretty low rate right now. You’re looking at a pretty low return environment.
Could you get those same returns in the underlying asset? The answer is, of course, you could. You could buy the same short term bonds or CMOs or other things.
The problem is that you don’t have the death benefit. You don’t have the contractual guarantees and you’re responsible for all of those decisions. You also are likely to have capital gains taxes plus or minus.
Not only are you foregoing the death benefit that is part of this equation. No matter how you slice it, whole life insurance is still life insurance.
There’s still a reason to have it. You have to have an insurable interest to do it.
So you don’t have the death benefit. You don’t have the tax benefits. And if you decide that’s what you’re going to do, and three years later, you drop dead, what you’re going to have is portfolio bonds that got 2% interest instead of an income tax-free death benefit.
To me, yes, you could do that. You could even do that and then buy term and invest the difference in the CMOs or the bonds. That strategy fails for a couple of reasons.
The biggest one is behavior. Most people don’t invest the difference. Most people will do that, and then they will wind up spending the rest of that money.
If you have the discipline to do it and you actually do it, you have a 30-year window where you have 30-year term insurance and you have to replace that death benefit with an investment that would make sure that your portfolio was equal to what the death benefit would be in 30 years.
When you look at that math, particularly with interest rates and market returns being somewhat muted currently, you’ll find out that you don’t have the cash flow for it. Most people don’t.
Yes, you can own the underlying securities. It won’t work as well, and you’re the one on the hook instead of the company.
The company has replacement reserves and a hundred thousand other policy owners who are paying so that there’s not only replacement reserve. There’s an emergency fund there that you don’t have necessarily.
Andrew Chen 41:45
What are the main factors that somebody should consider when picking a life insurance company, especially for whole life?
Knowing that you’re making a lifelong commitment, it’s going to be costly if you back out, if you change your mind later, not only because of the penalties and fees for backing out, but also getting underwritten again with a new company is probably going to be more expensive as you get older and your health deteriorates.
So you really want to make the right choice upfront. What are the factors that people should really scrutinize when picking a whole life insurance company?
Eric Brotman 42:15
A couple of things. First, you want to look at an insurance company’s ratings, the Fitch ratings or the S&P ratings. It’s important to see that.
Now, we’ve had times over the years where those ratings have felt politicized or tinkered with, but for the most part, looking at Moody’s or S&P or Fitch is a good start.
The other thing is you want to make sure that if you’re buying whole life insurance, you’re buying it from a mutual company and not a stock company. This is really important and it’s not a nuance. And here’s why.
If you buy whole life insurance for a company that has stockholders, if the policy performs well, before you get a dividend as a policy holder, the company is going to make dividends to their stockholders to keep Wall Street happy, to keep their investors happy.
If you’re in a mutual company, there are no stockholders. You are a stockholder by virtue of your ownership of that policy. So there’s only one group getting dividends.
When returns are good, you want that higher dividend payout. As a policy holder of a mutual company, you’re first in line. As a policy holder of a stock company, you’re second in line and that doesn’t make sense.
Now, some companies were mutual companies years ago and demutualized. What happened was they converted the policy owners’ equity to stock and provided shares to stock instead of that, so people got what looked like a stock windfall.
It was not a good deal. You don’t want a company that’s demutualized.
There are only a half-dozen or so really good insurance companies left, but I think the consolidation of those at this point is unlikely. I think they’re all pretty stable on their own. And of those companies, there are three where I would say I’m awfully comfortable with them, and then there’s some others I’d have to look at with a hairy eyeball and double check.
But if you have a mutual company that has a long history, including a long dividend paying history, some of them are 150 years old, and not only is it mutual, but they have a good rating, I think that’s where you start.
Andrew Chen 44:22
What are the three that you are personally comfortable with?
Eric Brotman 44:26
I think the three strongest companies right now for this purpose are Guardian, MassMutual, and Northwestern Mutual. And there’s pros and cons to each of them.
I like Guardian because they do have a higher stock exposure typically in their underlying general account, which over time has provided for better dividend paying for the policy holders.
I think MassMutual has a very strong product line and very strong financials. I do think that their short pay contracts aren’t as good as Guardian’s.
That’s who I own. That’s who I use primarily.
And then Northwestern is an interesting case because Northwestern is not available to independent advisors to represent. They have their own secret sauce and they have their own sales force.
While I think it’s a fine company, that model bothers me because if you’re working with someone with that company, they are going to try and provide you with a solution from that company’s shelf.
I don’t work for an insurance company. We work for our clients only, and we are agnostic as to whether they do the business with us at all.
They’re free to take our advice and go do it themselves, or we can help them procure that, but we don’t have any extra grind with any of those companies. I do think that’s important.
That said, Northwestern’s product line is terrific. I just fear their sales force because I think they will try and find their solution for any problem.
Andrew Chen 45:58
Yeah, that’s a good point. Actually, speaking of intermediaries and life insurance, I’d love to get your take on, since you don’t work for the industry, how life insurance agent/broker commissions work.
As I understand, there’s typically a very large upfront bounty for signing the customer up, and then there’s some recurring component. I’d love to just understand better the economic structure and the amounts involved and why they’re so high.
Eric Brotman 46:26
Sure. That’s fair, and you’re absolutely right. The life insurance industry is dramatically behind, for example, to the mutual fund industry that realized that upfront commissions were not a healthy way to do business.
Insurance companies price their product and include in their premiums all of the compensation, so you’re not paying something over and above what the premium is. The portion of the premium is going to the agent or broker or company or some combination.
The type of commissions will be based largely on the type of contract. With a term policy, for example, the commission can be almost 100% of the first year and then nothing beyond that. That’s pretty typical.
If you’re signing up for a 30-year contract and it’s $1500 a year, the person who represented that company and brought it to you is probably going to be paid $1500 in that first year. And then every year, they’re going to be paid nothing.
If it’s a company like Northwestern where you are an employee of the company, they tend to pay a little less upfront and something along the way because it creates a golden handcuff for you. They know that their sales force can’t go anywhere because they can’t take the business with them and because they’d be leaving compensation on the table.
It’s one of the ways that a company like that actually traps people working for them, which I do think is a conflict. And it’s maybe a conversation for another day.
In terms of the whole life vehicles, they vary. But for the most part, they tend to be paid out over a period of years. Often, it’s over a 10-year period.
There tends to be a larger amount upfront, but it’s nowhere near 100%. The contracts we use are close to 27% in the first year and then a much smaller single digit along the way.
From that standpoint, I think it’s a more fair deal. I think it’s a more consumer-centric situation. But it’s real important to know what you’re paying and who you’re paying when you buy something like that.
And it’s perfectly fine to ask. My answer in almost every case is “I have no idea, but I’ll find out for you” because I deliberately don’t want that to be part of our equation in coming up with a solution.
I know it exists. It is an inherent conflict of interest. If you’re in a practice where you’re doing fee-based planning and there is an insurance sale coming, somebody is going to be paid and it’s going to be the same amount no matter who it is.
For us, what we have to say is “You’re welcome to do that business with us. We’ll take care of it for you. We’ll make sure you have various reminders and we’ll make it part of your overall plan.”
“Or we can tell you what to get and you can go get it on your own. Just know you’re going to be paying the same amount of money anywhere.”
“Someone will be paid on it. Who do you want to be the one overseeing that for you?” Because there’s no way to avoid that in the current marketplace that’s reliable.
Andrew Chen 49:19
And I think that brings up a good point, which is that buyers may think, “I can learn this stuff on my own. Why don’t I just go buy direct from the insurance company, save paying the commission?”
That doesn’t work. Could you help us understand why it doesn’t? Like you said, you’re going to pay it no matter what.
Eric Brotman 49:36
For whole life, for a permanent product, you’re going to pay it no matter what. For term, there are direct-to-consumer term carriers that can be a few dollars less expensive, but that’s sometimes “buyer beware” because you don’t know who the carrier is or what kind of quality it is.
It certainly exists. Term insurance doesn’t require a great deal of sophistication to go buy. If you really want to do a deep dive on how much you should have and for how long and why, that’s a financial conversation.
If you just want to pick some up because you want it off the shelf, you don’t have to pay somebody to do that. But you won’t save much money. It’s a footnote.
In the permanent insurance world, whether it’s variable or universal or whole life or any of those kinds of things, it’s a commodity. You’re paying the same amount no matter where you get it.
The question is who do you want to be your advocate if and when there’s a claim or if and when there’s an issue or to remind you, “Here’s how we’re going to handle this or pay for it or include it in your financial plan”?
Most of our clients do that business with us, but they absolutely don’t have to. And there have been some exceptions for various reasons.
I tell everybody the same thing in our first meeting. I’m like, “If you have a brother-in-law at Northwestern Mutual and you’re going to screw up Thanksgiving by not doing the business there, I’ll tell you to go get it. It’s fine.”
“In the absence of that, you’re going to pay the same thing anyway. And if you’re willing to favor us with that, we have a team of people who will take care of it for you.” That’s all.
Andrew Chen 50:57
Just so folks can have a mental picture of this, for a million-dollar whole life policy from one of the three companies that you mentioned, regardless of whoever gets paid, over the course of that payout duration, whether it’s 10 years or otherwise, roughly, ballpark, how much are they getting paid?
Eric Brotman 51:20
That’s such a loaded question because it depends on ratings and ages and premiums and just a lot of variety there.
Andrew Chen 51:27
Middle-aged male, 40 years old, whole life policy, a million dollars.
Eric Brotman 51:33
It depends. Is it whole life that you pay for until you’re 121, or is it something you pay for 10 times, or do you pay for it until 65? There’s so many variables.
I think it would be difficult for me to say because every company and every contract is a little different. I will give you a ballpark. To me, on a short pay whole life contract, I believe the total compensation to the agent over the course of the 10-year period is roughly half of one year’s premium.
If the premium is $10,000 a year and you pay for it 10 times, you’ve spent $100,000. The compensation of the agent is probably about $5000 on a contract like that.
Andrew Chen 52:10
Gotcha. Do you ever have folks who cancel whole life?
If they do, what are the scenarios that happen? And when might it actually make sense to do that?
Eric Brotman 52:26
Truly, almost never. As long as you don’t own it in a trust that’s inflexible, which is why I tell people not to put whole life in trusts, there’s almost no reason to cancel it. There are better ways to access it.
In most cases, there are ways to stop paying for it. Even if you reduce the benefit, you can potentially strip some cash out of it for other purposes and still not pay taxes on it as long as you don’t surrender it. So there is almost no convenient or smart way to get rid of one.
Now, if you have a policy that, for whatever reason, isn’t performing, you can do an exchange from one contract to the other. And you can take your cash value and roll it from one contract to the other. It’s a tax-free exchange and it carries over your bases.
So there are ways to save it. Now, that will take underwriting, and it may or may not be a good idea, but there are reasons why sometimes that makes sense.
With whole life, it’s rare to cancel. With universal or variable or other types of permanent insurance, there’s lots of reasons to cancel because they’re based on either equity markets or they’re based on interest rates.
Rarely is that a cash value discussion. Oftentimes, it’s not a guaranteed premium and there are reasons why you would cancel it.
And often, there’s a loss. There’s no tax when you cancel it because you lost money. That’s a terrible outcome.
I don’t think anybody would deliberately sign up to lose money just so they could avoid taxes. But with whole life, it’s extremely rare. I can’t think of a good reason to cancel one outright.
You can reduce them. You can change them. But I can’t think of a good reason and I can’t think of a good tax outcome to do that.
Andrew Chen 54:01
You mentioned a moment ago. I just wanted to make sure I understood. Rather than cancel, it may be more sensible to change the product from one contract to another.
Can you say more about what that means? And when would that make sense?
Eric Brotman 54:18
Just like in the real estate world where you have a 1031 exchange option where you can exchange one property for another, carry over your basis, and as long as you do it right with the right intermediaries, you don’t pay taxes on the sale immediately, Code 1031 does that for real estate. Code 1035 does it for life insurance.
The way in which that works, a life insurance contract can be exchanged for a different life insurance contract or for an annuity vehicle as long as you have the same owner and it’s like kind.
The reason to do that, potentially, is because you bought a contract in 1984, and 30 years later, it just simply isn’t performing and there’s ways to change that. Or you bought something with a benefit that became larger than you needed and you decided to reduce it, but in doing so, you realize there were other options.
For example, let’s say you’re having a cash flow issue and you have a million-dollar whole life contract and there’s $100,000 cash value in it, hypothetically. I’m making this up.
It’s not enough necessarily to carry the contract. You have to continue to make premiums or you have to reduce the benefit.
Let’s say the whole life policy says, “You’d have to reduce the benefit to $300,000 to keep it and not pay premiums.” And not paying premiums would not be guaranteed because it’s based on dividends continuing in those kinds of things in that case.
You might say, “Oh my gosh. I’ve got this $100,000. I don’t want to pay taxes on it.”
“I don’t want to lose it. But I also want to see if there’s a way to have more life insurance than $300,000 because that was the key element to doing this.”
So you might be able to take that $100,000 and use it as a one-time payment to, for example, a universal life carrier that says, “We’ll guarantee your death benefit until you’re 125 years old, and the benefit will be $575,000.”
You say, “That’s better. I’ll have the bigger death benefit. What’s the catch?”
The catch is your cash value is no longer your cash value. There’s no free lunch ever.
So if the most important thing is the death benefit, you can exchange one contract into another, eliminate the premium, and elevate the death benefit.
If the most important thing is the cash value, you wouldn’t do it that way. You’d reduce it. You’d pull some money out of it.
Every single case is different, so it’s real important to know that you’re working with folks who understand the nuances of it and can help you either unravel something that’s not working or improve it or fix it or replace it or supplement it.
Sometimes the best advice isn’t to get rid of something. It’s to supplement it with something else and to have both.
There’s reasons why you can solve these things in a tax-free way and it makes sense. You just have to look at it objectively and from 30,000 feet and not to look at it as “What can company XYZ do for me?”
Andrew Chen 57:10
So figuring out what product is right for you, how much, what the term is, is complex and very case-specific, as you mentioned.
What are the few most critical questions that you will typically ask a person who is looking to buy life insurance to determine how to best advise them? Just so folks can have a sense of what are the kinds of questions they should be reflecting on for themselves before they get to that point.
Eric Brotman 57:40
Normally, in doing a full comprehensive financial plan, we’re going to come up with various scenarios where there’s going to be a need for an infusion of capital. It may not require life insurance. It might require some other strategy, but that would be one of the potential solutions.
More often than not, our clients aren’t telling us how much they want. Most of the time, we’re telling them, “This would be perfect. Life is not always a game of perfect, so let’s see how close too perfect we can get,” because everyone has finite resources.
So I think the most important question whenever you’re buying life insurance is “How much death benefit do I need in case I die tomorrow? What’s the emergency plan here?”
Because having something that’s going to grow beautifully for 30 years but that leaves your family in a lurch if you get hit by a bus tomorrow isn’t a good solution.
So the first question is always “How much?” It’s never “What kind?” It’s always “How much?”
Then it’s “For how long? Do I need this forever? Do I only need it until the kids are out of the house?”
“Do I need it until college is over? Do I need it until the mortgage is over? Do I need it until I retire or collect Social Security?”
There are literally an infinite number of combinations and reasons to do that, and there’s a solution for everything if you’re objective about it and if you can say, “We’re going to plug these gaps with different solutions from different insurance companies and use them in specific ways.”
But the number one question is “How much should I have?” And number two is “For how long?”
It’s like “Do you want ice cream or yogurt?” before you figure out what flavor. What is the need here? What do you want?
And then the other thing I would say is that there’s a process, there’s an experience when you deliver death claims. I’ve been at this long enough that we’ve had clients or their loved ones die. It happens, of course.
When delivering a death claim, I can tell you definitively, the one question no one has ever asked me, “What kind of insurance was this? Was this whole life or term?” They don’t care.
“How much is it? How soon can I get it? Am I going to be okay?”
That’s all. And if you can answer those questions, “We’re going to get this in the next 10 to 14 days, and it’s not going to be taxable, and we’re going to have an account where it can be set up, and yes, you’re going to be okay,” then we’ve done our job.
No one has ever asked, “What kind of insurance was it?” They don’t care. It doesn’t matter.
Andrew Chen 1:00:13
That’s a good point. The last question I have is what are the tradeoffs that you see for whole life in the payment mechanism, choosing between short pay versus a non-short pay contract? What are the tradeoffs for choosing one or the other?
Eric Brotman 1:00:31
The tradeoffs are cash flow. In a similar way to doing a 10-year mortgage versus a 30-year mortgage, the 30-year mortgage is going to have the lower monthly payment, but the 10-year mortgage is going to build equity more quickly.
So if you’re in a position where you can fund a contract over 10 years, particularly if you’re, say, 45 years old, that’s typically where these things happen. You’re 45 years old. You want to retire at 65.
You have a couple of options. You could do a 20-pay whole life insurance, or you could the 10-pay, and then at 55, you could start addressing long term care or elder care issues instead of the life insurance issues.
Maybe do a 10-pay on the life insurance at 45 and a 10-pay on the long term care type of solution at 55. And by 65, you’re ready to retire, you’ve hit your financial independence goal, and you have no insurance premiums.
The thing that scares me about contracts that don’t have short payments, anything you pay for forever scares me a little bit because we don’t know what other bills you’re going to have or what income you’re going to generate. I would no sooner sign up for a lifetime mortgage as I would necessarily for a lifetime insurance agreement.
And there’s reasons why some people have to. Let’s face it. If there were a 40-year mortgage that would get you into a house where you couldn’t afford the 30-year, maybe that’s okay if it’s the only solution you have, but it’s rarely going to be the best one.
Andrew Chen 1:02:01
That’s good food for thought. Eric, this has been incredibly insightful. I’ve really enjoyed our conversation.
Where can people find out more about you, your work, your services, your practice?
Eric Brotman 1:02:13
First, what I’ll say is, for anyone who wants to read more about the use of whole life insurance and other tax strategies, Roth IRAs, HSAs, and so forth, I published an eBook at lowtaxbook.com. It’s free. You can download it and read all about it.
We’ve had a lot of folks who have benefited from that. It talks about the tax strategies most Americans can use. Again, it’s a free resource.
If you’d like to know more about our company, we’re at bfgfa.com. And if you’d like to check out my podcast (I hope you will), it’s at dontretiregraduate.com or brotmanmedia.com. That’s where the new book will be in September.
We’re excited. Lots of good things happening. So thank you for having me and for allowing me to promote that.
Andrew Chen 1:02:55
Perfect. We’ll definitely link to those things in the show notes. Those sound like really valuable resources.
Thank you so much again for taking the time to chat. And all the best during this time.
Eric Brotman 1:03:05
Thank you so much, Andrew. It was a pleasure.
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