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Mention retirement to any group -- no matter how young or old -- and the knee-jerk reaction is almost always the same: stuff as much as you can into a qualified retirement plan (for example, IRA, 401(k), profit-sharing plan and the like). Actually good advice.

Why?

Well, the money going into the plan is 100 percent tax-deductible and your earnings are tax-deferred until the day you take money out. Good! Very good!

But wait, what happens when you take the money out?

Not so good. You are hit with taxable income (plus a 10 percent penalty if you are not older than age 59½). Worse yet, if you die with funds in your plan, your heirs are robbed by a double tax, both income and estate tax as high as 73 percent, with your heirs only getting 27 percent.

Think about it: $1 million in your plan(s) is demolished down to $270,000. Bad. Real bad. Apply this sad tax tragedy to your own plan(s) numbers.

What’s better? A Roth IRA!

Sorry, you can’t deduct your contributions to a Roth. But what happens when you take those dollars out? Drum roll, please. Tax-free! Yes, every penny comes out free of the income tax. Great!

Any problems with a Roth? Unfortunately, yes. There are two significant restrictions: without giving all the gory details:

(1) If your income exceeds $114,000 and you are single, you cannot make any contribution to a Roth; if married, the prohibition number is $166,000 of income.

(2) The maximum annual contribution for 2007 is $4,000, rising to $5,000 in 2008.

Is there really something better than a Roth IRA? Of course there is. And the strategy has been around since the 60s. Yet few people know the strategy --called a “Private Retirement Plan” (PRP) -- even exists.

Taxwise, a PRP is exactly like a Roth: no deduction when funds go into the PRP, no tax when the funds -- contributions, plus tax-free earnings -- come out. Now here’s what makes a PRP superior to any other plan:

(1) There are no restrictions as to how high (or low) your income can be.

(2) There is no limit on the amount of your annual contribution.

Truly, a PRP -- whether or not you are a resident of Florida -- is the best tax-advantaged retirement plan I have ever seen.

A PRP is simply a special kind of high cash surrender value life insurance policy. We have been using PRPs to fund for retirement for clients, their children and even grandchildren since the early¥’50s. Although a PRP is easy to do, each one (whether for a 1-year old or a 60-year old) must be individually designed. So if you are a reader of this column and would like to see real-life numbers of how a PRP might work for you (or other family members), fax your name and birthday (same for other family members) along with all phone numbers (business/home/cell) where you can be reached.

Are you one of the many readers who has accumulated large amounts (say $300,000 or more) in your IRAs, 401(k)s or other plans? If so, you have a huge tax problem and can lose up to 73 percent of your hard-earned plan wealth to the IRS.

Are you forever stuck in this horrible double tax trap? Probably not. There are a number of easy-to-do plan rescue strategies to get you out of the trap. Like the PRP, each strategy must be individually designed.

So, if you want to learn now to escape your qualified plan tax trap, fax me (Irv Blackman at 847-674-5299) the information requested above for a PRP, plus the total amount in all your qualified plans. Write “Plan Rescue” at the top of the page.

Irv Blackman is a certified public accountant who lives part-time on Marco Island and specializes in estate planning, business succession and asset protection. E-mail him at 

wealthy@blackmankallick.com or call 417-9732. His Web site is http://www.taxsecrets

ofthewealthy.com.