Most Americans know the importance of saving for retirement, but very few really go beyond the traditional 401(k) as their main retirement weapon. They believe that their 401(k) will enable them to live comfortably if they have social security to supplement their 401(k). However, social security payments are typically small and there is a limit to what an individual can receive. Also, an individual in retirement will be paying taxes when they withdraw from a 401(k).All Your ‘Freedom Checks’ Questions Answered. It may be prudent for individuals to understand how investing in “Freedom Checks” can provide tax-free income and greater returns than average investments.
When an investor wants to start receiving “Freedom Checks”, they must buy shares in a “Master Limited Partnership”. MLPs are not required to pay federal income taxes, so they tend to have higher profits. To enjoy this advantage, they must pay their shareholders ninety percent of their profits. The distributions that MLPs pay are typically higher than a regular dividend paying company. Not only does an investor receive a higher distribution check, but they don’t have to pay any taxes on the “Freedom Checks” they receive. This combination can allow an investor to achieve superior returns for many years. Depending on the initial investment, an investor could potentially receive a higher payout than they would on social security. Many MLPs are related to the oil and gas industry. As the earth’s population rises, the need for vehicles and fuel will rise. Many MLPs should have higher stock prices to reflect this.
Investors unaware of Freedom Checks may want to know how to start taking advantage of this opportunity. Anyone with a brokerage account can start investing in MLPs. They trade like any stock on the major exchanges. After an investor chooses an MLP, they will start to receive “Freedom Checks” the same way they would dividends. A company will either mail the distributions or they will be deposited into the investor’s brokerage account. Some MLP shares sell for as little as ten dollars, which means that people with modest means can take advantage of the tax-free gains from MLPs.