patrick kelly

What “Tax-Free Retirement” by Patrick Kelly Says for Doctors

by Michael Goodman

Tax-Free Retirement by Patrick Kelly

Way back in 2011, I reviewed the book, “Tax-Free Retirement” by Patrick Kelly and gave it a strong recommendation. That review is one of the most popular pages on my site. Now that my practice is focused on doctors, I thought this would be a good time to look at what Mr. Kelly’s book recommends for doctors.

Chapter 20

In chapter 20 of Patrick Kelly’s 10th Anniversary version of “Tax-Free Retirement” (2017), Patrick writes, “Doctors have many unique attributes. And in my opinion, their unique attributes are what makes this group one of the most significant to benefit from the strategies in this book.”

He then lists four reasons why doctors are a great fit for using an indexed universal life policy (IUL) for retirement planning.

“Reason #1

Most doctors make more than $196,000 per year, which is the phase-out limit for being able to contribute to a Roth IRA. Therefore, they have no truly viable tax-free retirement option available to them other than life insurance.” (NOTE: in 2021, a married couple making over $208,000 cannot contribute to a Roth IRA, while the maximum deposit is only $6,000 unless you’re over 50 years old)

“Reason #2

Doctors are specialists. They have given their lives to be the best at what they do – and they are. However, this level of specialty often leaves little time for less urgent activities such as retirement planning”

“Reason #3

Doctors are often taken advantage of by snake-oil salesmen in the financial realm hocking half-baked, poorly-formed investment strategies promising wonderful returns.

“Reason #4

Doctors generally need a lot of life insurance for three reasons. One, they need to protect a large income for their families. Two, they usually carry high debt. Often this is due to starting out in debt from large medical school bills and low wages during their residency and internship years. Three, doctors as a group have one of the lowest life expectancies of any profession.”

Bottom Line

Most doctors that work at a hospital have a contract that provides a life insurance policy (usually a term policy) and a retirement plan of some sort (usually a 401k plan these days). But the life insurance policy often leaves them under-insured and the qualified retirement plan is likely to create an income tax problem later. Doctors in private practice usually have to pay for everything themselves, or through the organization that owns the practice.

When comparing the various options available to doctors that want to supplement the benefits in their contracts, or create a retirement plan by themselves, Patrick Kelly says on page 147 of his book there is “one superior option – life insurance!” Explaining why, he summarizes that life insurance offers an “unlimited contribution potential,” “grows without annual taxation,” “takes no time to manage,” “provides a huge sum of money to the physicians family in the case of an untimely death,” and “best of all, if structured properly, the policy can allow access to future money tax-free.”

What’s not to like?

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Review of “Tax-Free Retirement” by Patrick Kelly

Review of “Tax-Free Retirement” by Patrick Kelly


The book, “Tax-Free Retirement”, by Patrick Kelly is a national best-seller that takes a look at the failures of the “tax-qualified” retirement plans like the 401(k) and IRAs and recommends a solution that works better for many, if not most, people. Patrick Kelly was an insurance agent who made a lot of money in the go-go days of the stock market, only to lose most of it in the dot-com crash. Returning to life as an insurance agent and financial planner, he carefully researched the various options available to his clients. He describes the situation on pages 19-20 –


“So, in a miraculous way, I found myself back in personal production as an insurance agent in January 2001. But everything had changed. The financial landscape had been transformed. Insurance companies were offering bank products and banks were selling insurance. Everybody was in everybody else’s business. It was now one financial marketplace and I was ready to dive in.

I was ready to build wealth in a new way. However, I didn’t yet know what that meant. I was going to make an honest search unlike any I had ever made before. I wasn’t going to settle for an answer just because somebody told me it was good. I was going to do my own homework….flesh out the real data. Every last detail had to make financial sense. Other than individual stocks and commodities, at that time, I was able to sell most other financial products. I could offer 401(k) plans, SEPs, Roth IRAs, Traditional IRAs, and personally designed pension and profit-sharing plans. And I could fund these plans with a bucket load of different products. I had just about everything in my own arsenal of products.

However, I was willing to go outside of my own business if necessary in order to find the best plan to build consistent wealth for the long-term; and because of my financial endeavors, I had the knowledge base to know where to find it.

I wiped the slate clean of all my preconceived beliefs and was willing to give each plan and strategy an equal and fair shot at victory. I wanted to pursue an honest search in which the winner was proclaimed by the facts, not by emotional attachment or personal access to a particular product.

The result of the search was shocking. If you would have laid a million dollars on a table in front of me and told me that all the money would be mine if I could name the product that would become the eventual winner, i could have had three guesses and still had to leave the money lying on the table. The winning strategy had been sitting under my nose my entire career but I had failed to see it.”

Patrick Kelly goes on to show why so many people fail to properly plan and act in ways that will secure their long-term financial health, then explains the winning strategy he had found, which is Universal Life Insurance. He not only explains WHY this is often the best approach, he even describes the best candidates for this strategy.

“Tax-Free Retirement” by Patrick Kelly is easily readable and I can’t recommend it too strongly, especially for those in the age ranges of 25-50.

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