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44 MMS June 2014 mmsonline.com blackman on taxes Columnist these accounts. Because the asset commitment is much higher than that of a retail annuity, the costs are much smaller, usually less than 1 percent a year. If you are looking to defer more assets in addition to your traditional retirement accounts, a PPVA account makes sense. Also, you can use a PPVA to endow your foun- dation or a public charity. Say you have $100 million of wealth. You are reasonably certain that you will never need to touch $25 million during your lifetime because you can live more than comfortably on the other $75 million. So you put $25 million in a PPVA. The money grows ta x- deferred. If you need to access any of it, you can, but if you don't, all of it will go to the charity or foundation at your death. Assuming reasonable growth of current tax and life expectancy rates, three to four times more money will go to charity using a PPVA. When you put money into a PPLI, one of two scenarios play out. In one, you never touch the money during your lifetime, the funds grow tax- free (minus insurance charges) and the payout is income-tax-free at your death. In the other scenario, you withdraw some money from the policy during your lifetime free of ta x. If you want to access more than the policy's cost basis (i.e., the premi- ums paid), you can borrow at reasonable rates from the policy, also income-tax-free. PPVAs and PPLI policies both of fer a great deal of investment flexibility. You can select from a large number of hedge funds, either with the help of the insurance company or a third-party advisor whom you select. If you have a large investment portfolio, whether CDs, municipal bonds, hedge funds, stocks, bonds, or any of the other endless parade of investment vehicles, a PPVA or PPLI is a smart wealth-multiplying strategy. Your wealth com- pounds at an accelerated pace, because you won't lose one cent to income taxes. ( Thank you to Aaron Abrahms, a partner at Winged Keel Group in New York City, for his tech- nical advice and help in writing this column.) HAIMER Power Clamp: Reliable shrinking – Fastest in the galaxy. Shrinking Technology Measuring Instruments Balancing Technology Haimer USA, LLC | 134 E. Hill Street | Villa Park, IL 60181 | Phone: +1-630-833-1500 | E-Mail: haimer@haimer-usa.com | www.haimer-usa.com Tooling Technology 0614_MMS_blackman.indd 44 5/13/2014 4:28:59 PM