Distribution: tax-free or tax-preferred
These types of accounts include:
- Tax-exempt bonds
- Roth IRAs
- Non-MEC permanent life insurance
It should be noted that life insurance is best utilized when someone is unable to contribute to a Roth IRA or need death benefit protection.
The important take away from this block is that it is possible to pay taxes on your money only once, not twice.
In our next blog, we will discuss the third block.