Will Rising Tax-Rates and Inflation Erode your Retirement Assets?
You need stock market type gains in order to overcome the increasing effects of inflation. But is it worth the risks? How do you offset the near certainty of higher taxes in retirement? And how can you ensure your nest egg want be hurt by the next market decline? How do you find the right investment vehicle to meet these goals? Below list some problems with traditional investment options:
- Mutual funds and stock are taxable and too volatile
- Variable annuities are too expensive and volatile
- Fixed & Index annuities offer smaller gains
- Muni bonds avoid taxes but are low yielding
- Bond & Bank rate products are taxable and low yielding
You need a different source of retirement income which is TAX-FREE during both its growth and distribution. This retirement assets must also be completely free of stock market risk while still being able to achieve stock market type gains. We can show you how this is possible. After watching the above video, please email us at Curtis@SerenityWealthManagement.com with any questions you may have. Or set an appointment on the Calendly link below.
High Investment Gains Without Stock Market Exposure
With an IUL, you could achieve stock-market level investment returns without any downside risk because you are partnering with a huge financial institutional middleman as a shield between you and the stock market. You avoid the risk because your money will never actually be invested in stocks. It will stay in a protected account which is credited with interest, based ONLY on the upside of the stock market.
In a good year you can earn huge benefits, and in a terrible year—if the stock market collapses like in 2008—you lose NOTHING. This is a simple guarantee from an indexed life insurance company. They are the safest financial institutions in existence, better funded and more regulated than banks or investment companies.
Instead of focusing on tax-deferral until retirement, the improved goal should be on building assets that will not be taxed in retirement (i.e., untaxed retirement assets)
How Are You Protected from Stock Market Declines?
How can an IUL provide you with high interest credits while often guaranteeing NO stock market losses? The key is that the insurance companies do not invest your money in stocks, they use much less volatile long-term investments. Then they credit you interest based on the performance of various financial markets of your choice according to your risk tolerance. You can conservatively limit your losses to ZERO in bad years, or aggressively accept the risk of a small loss, say one percent, to make even greater gains in good years.
Crediting methods always limit your losses but some also cap the maximum you can earn. Other crediting methods provide for uncapped index gains while still guaranteeing NO market losses.
For their own profits, insurance companies invest in bonds, upscale office towers, huge apartment complexes, specialty loan portfolios, venture capital and many other advanced instruments that the average investor can’t access. Profits from these conservative investments allow an insurance company to purchase leveraged financial instruments that provide for paying higher interest credits when your selected crediting method indexes outperform.
The important thing to remember is your money is not directly invested in the stock or bond market. Insurance companies have a long-time horizon. They do not need to make money in a particular year to be able to pay your index gain interest credit due in that year. If they take a loss paying your interest credit due in one year, they make it up in subsequent years. The insurance companies are guaranteeing your index credit based on the crediting method you select.
You Don’t Have to Die to Access the Money You’ve Build
At any age you can borrow from this increasing cash value. Why is borrowing better than withdrawing? Because loan proceeds are TAX-FREE and because most IULs have net ZERO INTEREST loan provisions. This allows monthly policy loans for retirement cash flow and borrowing lump sums for any other purpose.
In addition to paying no interest on these loans, you never need to pay them back. When you die, the tax-free death benefit pays off all these loans before any remaining death benefit goes to your heirs.
Other Benefits from Investing in an IUL
Let’s reject what Wall Street wants us to believe is a good investment and judge for ourselves what is best. Here is a list of optimal investment goals:
- ZERO taxes during the growth period and ZERO taxes in retirement
- Early access to cash with ZERO taxes at ANY age without penalties
- Stock market type investment returns without stocks market risks
- Guaranteed ZERO losses even during the worst stock market declines
- No limits on investment amounts, no income limits, no conflict with other plans
- Tax-free inheritance (unlike IRA, 401k and Annuities)
Banks Consider IUL’s So Safe That They Will Loan You the Premiums
That’s right, under certain conditions including where the IUL is held as collateral, a bank might loan you the money to pay the premium to purchase the IUL life insurance policy. It’s called premium financing. Banks have been doing this for the wealthy financially savvy for decades! In most such situation you will be required to take a policy loan to repay the bank after a period of time … say in 10 years after the policy has grown enough to support the policy loan. Banks’ willingness to make loans to purchase IUL’s speaks volumes about the security of IUL investments.
How Would an IUL Work for Your Situation
Your age at the time your start your IUL will affect the amount of TAX-FREE income you can receive later in life. This is for two reasons. The first is the younger you are the longer you have time to save into the plan. The second is the cost of life insurance is less for younger people. The table below provides a ball park idea about what level of retirement income could be expected. It is calculated to two different monthly savings amounts, $500 and $1,000. Please contact us for an up-to-date quote for your particular situation.
If you wish to learn more about this topic and other related personal financial topics, please check out the book The Wealth Conspiracy by Curtis Hill, available on Amazon and Kindle.
