We often illustrate policy loans with Indexed Universal Life (“IUL”) and thought you might like to see a specific mathematical comparison between fixed and participating loans. The key to the latter is the significant increase in values provided by loans secured by cash values that continue to earn the indexed interest that is credited to the policy. Fixed loans don’t include this feature.
To do this, we used the new InsMark Compare module that is available on the Personal Insurance tab in the InsMark Illustration System.
You can read the rest here: Blog #170 . . .
Blog #169 (Part 2 of 2) follows up on its Part 1 predecessor where the income tax strategies outlined in Part 1 are put into practice in an actual, retirement planning case study. The short-, mid-, and long-range net worth and retirement cash flow for a pair of top-tax-bracket married doctors are compared using Indexed Survivor UL vs. their various liquid assets (including their retirement plans). Some of those same liquid assets are alternatively converted to an income stream that funds the Indexed Survivor UL bearing annual premiums of $134,892.
Long-range, Strategy 1b has over $11 million more in net worth and over $3 million more in spendable, retirement cah flow. The additional net worth could easily accommodate a significant increase in spendable, retirement cash flow or, perhaps, a serious, gifting program for children or favorite charities.
Blog #169 further compares the results in various higher and lower tax brackets in order to demonstrate the variable outcomes of the asset based plans vs. the life insurance based plan. None of the alternatives stands a remote chance of competing with the life insurance.
You can read the rest here: Blog #169 . . .
The accumulating assets in tax deductible retirement plans reflect unrealistic values since they are subject to a deferred income tax. It is surprising that banks, federal and state regulators, and CPAs allow clients to show their net worth statements with the gross retirement plan amounts (since there is no way to avoid the tax during the client’s lifetime or at death).
Welcome to the world of those with money in deductible retirement plans (close to $24 trillion and counting), all of whom are sharing a major portion of their retirement assets with the Hidden Partner (the U.S. Treasury via its collection agent, the Internal Revenue Service).
Blog #168 explores the impact of subtracting the mandatory deferred income tax from the client’s net worth statements (and why it’s important that you provide your clients with this information). We then compare a tax deductible retirement plan to a cash value life insurance policy funded with premiums equal to the after tax contributions to the deductible plan. The results are impressive.
You can read the rest here: Blog #168 . . .
If your clients ignore life insurance in their retirement planning, they are essentially saying, “I am not interested in maximizing my spendable retirement cash flow.” Read on for the proof!
Blog #167 evaluates a Roth IRA vs. IUL. Similar to Blog #166 (Part 1 of 2) where we compared IUL to an IRA, the results of the Roth comparison provide huge motivation for redirecting to IUL the after tax cost of contributions funding any Roth IRA or Roth 401(k). The IUL logic develops either more net worth or more spendable cash flow while requiring no additional contributions.
You can read the rest here: Blog #167 . . .
Note: If your clients ignore life insurance in their retirement planning, they are putting their spendable retirement cash flow at risk.
Blog #166 evaluates an IRA vs. Indexed Universal Life (“IUL”). While it is a relatively small case, the analysis provides huge motivation for redirecting to IUL the after tax cost of contributions funding any IRA, Keogh, 401(k), 403(b), and Profit Sharing Plan.
The logic develops “free money” meaning either more net worth or more spendable cash flow while requiring no additional contributions. It makes no difference which deductible retirement plan is evaluated. In most cases, IUL outperforms them all.
You can read the rest here: Blog #166 . . .
Blog #165 evaluates a retirement plan for Harry and Paige Foster, both age 45, and operators of a lobster boat out of Bass Harbor, Maine. As you can see below, their current plan is not sufficient to meet their cumulative retirement cash flow goal of $5,037,432 from age 65 to 90. Neither is their revised plan which involves downsizing their home at retirement in order to free up additional capital.
Once again, Indexed Universal Life (“IUL”) comes to the rescue with no additional out-of-pocket cost for the Fosters.
You can read the rest here: Blog #165 . . .