The 401k has a track record of minimal gains and heavy losses. The IUL holds its value, even in a bad economy. Why gamble with your family’s future? Ask Affleck about the IUL: The greatest retirement tool nobody knows about!…(read more)
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When it comes to planning for retirement, many people turn to traditional 401k plans as their primary savings vehicles. However, the 401k system has a serious problem that often goes unnoticed by investors – lack of growth potential and market volatility. In recent years, there has been a growing interest in alternative retirement savings options, like Indexed Universal Life (IUL) insurance policies, that offer potentially higher returns and greater stability.
One of the main drawbacks of a 401k plan is its reliance on the stock market for growth. While the stock market has historically provided strong returns over the long term, it is also subject to significant fluctuations and volatility. This means that investors can see their retirement savings quickly diminish during market downturns, as we saw during the 2008 financial crisis. This unpredictability can be particularly concerning for individuals approaching retirement age, who may not have the time to recover from market losses.
On the other hand, Indexed Universal Life (IUL) insurance policies offer a different approach to retirement savings. These policies are a type of permanent life insurance that also includes a cash value component, which is linked to the performance of a stock market index, like the S&P 500. This means that policyholders can potentially benefit from market gains without being exposed to the same level of risk as direct stock market investments.
One of the key advantages of IUL policies is their downside protection. While investors in 401k plans are at the mercy of market volatility, IUL policyholders have a built-in floor that protects their cash value from losses. This means that even during market downturns, policyholders can still see some growth in their savings, albeit at a slower pace. This downside protection can provide peace of mind for retirees, knowing that their savings are not at risk of being wiped out by market fluctuations.
Another benefit of IUL policies is their potential for higher returns. While traditional 401k plans are limited by annual contribution limits and investment options, IUL policies offer the opportunity for uncapped growth potential. This means that policyholders can potentially see higher returns on their savings over the long term, without the same level of risk as direct stock market investments.
In conclusion, while traditional 401k plans have long been the go-to option for retirement savings, they come with their own set of risks and limitations. Indexed Universal Life (IUL) insurance policies offer a compelling alternative for investors looking for potentially higher returns and greater stability. By considering the pros and cons of each option, investors can make an informed decision about the best retirement savings strategy for their individual needs and goals.
Interesting Information
Regardless, if IUL is really good or not, the video is full of mistakes.
401k and IRA allow after-tax contributions, called: "Roth IRA" and "Roth 401k".
In both cases, growth and qualified withdrawals are tax-free.
One may withdraw from Roth plans the direct contributions tax and penalty free any time!
Roth is not taxed if inherited.
Total annual contributions to IRA and 401k: $6,000 + $19,000 = $25,000.
For 50 years old ppl: $7,000 + $25,000 = $32,000.
Employer may add matching.
401k limit on the total contribution is $56,000 ($62,000 if 50+).
All those contributions could be as Roth (or converted to Roth)!
For a working couple (both having 401k), the contributions could be doubled!
If you have a business, you can easily max out solo-401k and/or SEP-IRA.
Those are huge money, all could be Roth (or converted to Roth) if you want.
The video is very biased and contains a lot of mistakes, the above comments are just the most obvious.
Hi To All,
Im a Certified National Financial Educator and also work closely with life insurance products.
Sad to say I see many people who can't retire and its not because they didnt save enough but because of market loss, inflation, taxes, hospital bills and medication cost. You see a lot of elderly working and its not because they want to but they have to so they can survive.
There are many life insurance products out there and yes they do have their pros and cons. IUL overs up to 120 years old and is very flexible in face amount (asset protection) and premiums. It does come with living benefits and can work as a retirement vehicle depending on contribution/ time frame. Because the money in an IUL is used with taxed dollars and is tied to a life insurance it does have tax free benefits. Money in this IUL is protected from lawsuit, divorce and is only left to who you designate it to.
If the economy does decide to really go down and we go into a great depression then having it in a 401k or other investment options is the last option we want our money into. We want the safety principles where we dont have to worry about losing our money and IUL gives us that security and peace of mind. Like banks, if you have money in it and something was to happen they have FDIC up to 250k. The insurance carrier works in the same manner. If you have any hesitation or questions about your policy, call and ask your agent or carrier. I have A rated carriers I work with that been through the great depression and also paid out during the great depression. Be careful not to just get any life insurance because its cheaper. Look at their history and truly understand what insurance company you go with. You get what you pay for and you have to be extra careful.
I get from some people saying IUL is too expensive and it can be depending on age and health. Yes, you have to qualify to get this life insurance. Some people look at it as an expense and dont see what it can do. We insure our cars, home, phone but our life is the most important and we always tend to shy away.
If there's any questions I can help answer, please let me know. Thanks.
Oops
https://chrome.google.com/webstore/detail/threelly-ai-for-youtube/dfohlnjmjiipcppekkbhbabjbnikkibo
Wait… wait… what? How is this video not a scam or at minimum misleading? Everyone knows that you can withdraw from your 401k plan to buy a home or college even for major medical emergencies and even financial hardship. You may still have to pay the 10% penalty if you are under 59 1/2 and even that depends, but you still have access to your money. By the way, that is not the part that bothers me the most.
Here is what bothers me the most….
I have been watching a number of videos about IULs trying to get an understanding of the excitement.
One thing that I notice very consistently is that all the videos celebrate the benefits, but rarely if ever talk about the downside or even show any numbers about the downside.
Here is the downside from what I have seen so far….
The policy is an annual renewable term insurance policy which means that every year your premiums meaning your payments to the insurance is guaranteed to go up.
And of course… As you get older, the closer you are to death, the greater the risk is to insurance company so the higher your premiums are.
Sooooo… The IUL is a risk based product in the sense of…. The consumer is trying to answer the question….
Will the stock market increase and I participate on the upside index faster than my premiums will increase?
Note: When adding in all the other fees, the total cost of insurance might be even greater than just the cost to insure you.
Soooo for some numbers…
1) If the interest rate that you are credited with via IUL increases at 10%, but your premium costs increases at 12%, you will need to either increase your premium payments or terminate your policy. Note: That statement is based on the increase premium payments have already eaten through your cash value that the cost of insurance has already burned through.
So in essence, when you are younger say 18, the IUL might be a good deal, as like any investment if we can call it that, you have more cycles to go through before you need the money in retirement.
Buuuuuuuut if you are 40 and you are buying an IUL and you have any health condition, my question is…. Where are all the videos that talk about how well these folks are doing? lol….
By the way… I tend to be both open minded…. I think an IUL, whole life, term life, 401k, IRA, Roth IRA, have particular criteria that determines what is the best fit for the client.
Buuuuuuut at the same time, I think it is unfair that so many of these IUL marketing videos do not discuss the real risk associated with IUL policies or any products. By the way, to be fair, if you are getting ready for retirement and the we have a market crash that lasts for about 4 years and all you have is a 401k, guess what? That is a real problem as well.
So all products have their downsides, I just get frustrated when people sell the dream and essentially bate and switch people into believing that they have finally found the perfect product that minimizes taxes, helps the consumer outpace inflation, and allows the consumer to withdraw money from their IUL via loans that help them avoid impacting their social security or any other assistance that they may be receiving.
Just be transparent and allow the consumer to make an informed decision…
Peace….
Scam Alert This is a garbage video these products should be illegal they take advantage of the unknowing