If you don’t fully understand what they’re selling, you probably shouldn’t be buying.

Question: My realtor and an investment adviser are trying to sell me on something called a 7702(a) Private Plan. As I understand it, it’s a retirement savings plan that doesn’t give me a tax deduction now but allows me to save taxes later. Have you heard of this and, if so, what are your thoughts on it? —Mike, Lauderhill, Florida

Answer: If you start poking around on the Internet, you’ll find a number of people touting what they variously refer to as or 7702(a) private plans. The first thing you’ll notice is that they’re not shy about touting the putative benefits of these plans - No contribution limits! Tax-free income! No withdrawal requirements!

Nor are they above insinuating that these plans are somehow endorsed by the government. The phrase “IRS-approved” comes up a lot.

What you won’t find, though, is much information about what these plans actually are and how they work. The descriptions are vague at best. It’s all very mysterious, as if they don’t want to reveal the secret sauce. I came across one site that features a presentation consisting of 125 Powerpoint-like slides that gives virtually no specifics other than the less-than-helpful revelation that “7720(a) is something different.”

Maybe the reason for the big-hype-no-details approach is that this isn’t a revolutionary new idea. It’s pretty much a big sales pitch to get you to buy a life insurance policy and do your investing within it - a concept that has been around for years. All the “IRS-approved private-plan” mumbo-jumbo is just a gimmicky way to market it.

As for the 7702 and 7702(a) references, they’re not some Maxwell Smart secret-agent passwords. They just refer to sections of the Internal Revenue Code that regulate the taxation of insurance policies.

When you strip away all the hype, the pitch boils down to…