Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

401ks made sense when tax rates were falling. But those days are gone.

15 Aug 2025 · 1 min

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Short YouTube commentary by Craig Wear, CFP® arguing that traditional pre-tax 401(k) contributions made sense when marginal tax rates were falling, but with taxes likely rising, wealthy individuals often avoid overfunding pre-tax retirement accounts. They typically contribute only enough to receive employer match and instead prefer tax-free tools—particularly cash value life insurance—for control, flexibility, and tax-free retirement income. The speaker notes they do not sell insurance or manage assets but describes cash value life insurance as a common strategy among wealthy clients.

Chapters

What rich people know about 401ks that maybe you don't 401ks make sense when tax rates were falling but now tax rates are likely going up so why put pre tax money in now only to get taxed more later so the wealthy people that we deal with kind of do this they contribute to get the match free money from their company they don't overfund it instead they use the tax free tools like maybe it's cash value life insurance why? For control, for flexibility for tax free income don't just follow the herd think like the wealthy and remember that life insurance can be used in a variety of different ways to your benefit no we don't sell life insurance and we don't manage client assets but cash value life insurance might be a good fit for you it gives you control and we've seen a lot of wealthy people that's how they fund their future income needs is through that which allows them to do it totally tax free.