CRT's for Retirement


What's the most important economic consideration for retirement? CASH FLOW!

What's the #1 obstacle to building wealth? TAXATION!!

Future cash flow comes from your investment performance during your working years and taxation erodes investment results faster than any other item. When you add up the impact of taxation it staggers the imagination.

Example: 2 doctors decide to save $10,000 each and every year from 1976 to 1994 (their ages 45 to 65). Both invest these systematic savings in Fidelity's Magellan Fund. The actual historical results are somewhat overstated for Dr. B. because we utilized today's tax rates which are more favorable than tax rates prior to 1986. Dr. A utilized a charitable retirement plan and thus defers all taxation until the cash flow begins to come out at age 65. Dr. B, however, pays taxes as he goes along results:

Dr. A Dr. B

Savings $3.3 Mil $2.0 Mil


Cash Flow $330,000 $200,000

Dr. A has literally 60% more cash flow yet both invested in the same thing. Think about it, Dr. A has $130,000 more cash flow each and every year.

Why pay taxes on money you're not going to spend? As you can see, charitable retirement plans have at least one significant benefit more cash flow.