Best use of $5k annual premium for retirement cash?

[Golfnut2112]

Here's a 4-hour training video. I'll just reference two time-stamped parts.





Of course, this training is with State Farm, and they no longer sell investments/securities in their offices because of all the DOL issues. At least I haven't heard that they've decided to reinstate broker/dealer sales in their offices.

Once again this is one of the most ridiculous one side bunch of BS I’ve ever heard.
The first part can be handled with a Roth IRA or life insurance but I already know which one is going to be sold. The second part is nothing more than being a fear monger. I wonder if they ever heard of a tactical money manager who puts stop loss provisions in place. If not, any advisor worth a damn would move the money.

 

[Golfnut2112]

Once again this is one of the most ridiculous one side bunch of BS I’ve ever heard.
The first part can be handled with a Roth IRA or life insurance but I already know which one is going to be sold. The second part is nothing more than being a fear monger. I wonder if he ever heard of a tactical money manager who puts stop loss provisions in place. If not, any advisor worth a damn would move the money.

I just realized the second comment was from a State Farm agent. Why would you even post that??? He may know auto,home and life insurance but based on his comment on losses he knows NOTHING about investing. HE’S A FEAR MONGER!!! I wonder if he has ever heard of risk tolerance or asset allocation. I can already hear him telling people you don’t want to invest in the market you can lose half your money like in 2008 then you need to make 100% to get it back. You will be dead by then and your wife with have a new boyfriend because you were a dumb a$$ and invested in the market. The reality is most people older than 50 usually have a stock and BOND portfolio which may be as high as 60 to 90% bonds. BTW I golf once a week with two local State Farm guys and neither one did much security work except for the occasional IRA.

 

[DHK]

Actually, it was me writing the notes of what's going on at that time-stamped section, not a State Farm agent.

Here's what I'm gathering: You take an investment advisor approach - hence your discussion of risk tolerance, and then recommending either FIA or ETF portfolio. You use life insurance purely as a death benefit and primarily use whole life for permanent needs.

Nothing wrong with that.

He (and I) are taking an economic, tax, and insurance contract provisions approach through questions being asked to help people protect, preserve, and grow the assets they do have.

He sees a different economic future than most investment advisors do. It's that economic perspective that directs the recommendations.

We're simply going to be seeing our roles differently because of our experience and our perspective of the future and motivate our clients to make decisions, partly based on those perspectives.

At least we both know where we're coming from.

 

[DHK]

I just realized the second comment was from a State Farm agent. Why would you even post that??? He may know auto,home and life insurance but based on his comments about losses he knows NOTHING about investing. HE’S A FEAR MONGER!!!

He was with Banker's life for 16 years before leaving for New England Financial / Met Life. He was with Met Life for a long time before the MassMutual merger.

He's not a State Farm agent.

 

[DHK]

I wonder if he has ever heard of risk tolerance or asset allocation. I can already hear him telling people you don’t want to invest in the market you can lose half your money like in 2008 then you need to make 100% to get it back. You will be dead by then and your wife with have a new boyfriend because you were a dumb a$$ and invested in the market. The reality is most people older than 50 usually have a stock and BOND portfolio which may be as high as 60 to 90% bonds. BTW I golf once a week with two local State Farm guys and neither one did much security work except for the occasional IRA.

But... he has a Series 6! You already said that he must not be trying to fit a square peg in a round hole! He must understand asset allocation, right? /end sarcasm

Even Guy Baker will tell you about -50% losses and needing 100% returns to get back to where you were. You know Guy Baker, PhD, MSFS, CFP, ChFC, CLU, etc., right? And he has written about investing and has an RIA firm.

This is Guy Baker guest-lecturing at Loyola University. I set the time for right when he's talking about risk tolerance and returns.

 

[Golfnut2112]

Actually, it was me writing the notes of what's going on at that time-stamped section, not a State Farm agent.

Here's what I'm gathering: You take an investment advisor approach - hence your discussion of risk tolerance, and then recommending either FIA or ETF portfolio. You use life insurance purely as a death benefit and primarily use whole life for permanent needs.

Nothing wrong with that.

He (and I) are taking an economic, tax, and insurance contract provisions approach through questions being asked to help people protect, preserve, and grow the assets they do have.

He sees a different economic future than most investment advisors do. It's that economic perspective that directs the recommendations.

We're simply going to be seeing our roles differently because of our experience and our perspective of the future and motivate our clients to make decisions, partly based on those perspectives.

At least we both know where we're coming from.

You are definitely right about me, except tax planning is a large part of my business. I actually prepared taxes until a few years ago. If I write an annuity ( that’s only when the client wants an absolute guarantee of principal) I will almost always take the interest out and put it into a fee based account set up as a TOD. If they are healthy and do not need the money for income I love using a fully underwritten participating whole life policy either with a SPIA or a single premium it’s a great wealth transfer tool. BTW most of my clients are over 50 with the majority being over 70.

 

[DHK]

That's right. You have mentioned that wealth transfer planning is certainly a part of your process.

I'll share with you one more clip. You *might* like it (but I won't hold my breath).

3:35:35 - UNDERSTANDING AND STRUCTURING WEALTH TRANSFERS: Questions; Life Insurance; last half hour is this idea; Annuities, Questions, More Questions; Idea is on the white CD (2014) on the order sheets; the February issue of Newsletter (2017), wrote out this sales idea in writing with all of the questions. 8 pages of stuff;

I have a lot of middle class people that live in 900-2,000 sq foot houses that are fully paid for; $30,000 SSI; $250,000 in IRA and they have to take a $10,000/year RMD. 27.4 / 275,000 = $10,000/year. $300,000 in an IRA; take out $10k. They're angry that they have to take out the $10k. They're saving out of their SSI. The only people that have any money are grandma and grandpa.

Is there somebody at the IRS that you're so madly in love with..., etc. In your office with statements: "Excuse me, is there any chance I could see your after-tax statement?" Not all the money in their IRA is theirs. Do they realize that? Do they really have $300k? If you ask the right way - "find the money". WHO in America do people hate worse? Taxes or Insurance Agents?

Under the law in 2017, the standard deduction for a couple over 65 is $15,200; www.irs.gov Forms & publications; IRS 1040 instructions. Print them out - 105 pages. It should be required law that insurance agents read the 1040 instructions every year; read page 30, 40, 41, 102, and page 103. Chart of how much of your social security becomes taxable. What is the personal exemption; 41 - standard deduction for couple over 65. 102 - revenue from sources and outlays; 103 - income tax brackets. 10/15/25/28/33/35/39.6; Are they going to believe me or the Internal Revenue Service?

3:44:30 - Underwriters go nuts on some of these cases! Call the client to explain it. Declare it and pay no taxes, I can expand this money; if I'm insurable, please issue the policy. $13,400/year while they make $30,000/year of Social Security;

3:46:00 - "Van, are we going to do the same thing again this year as we did last year?" Teach them one time, they buy into the system, and they do it forever! They don't know or understand the progressive nature of the tax system! You can move enormous amounts of taxable money and do it tax-free (or for a bargain). Instead of worrying about the family, let's be selfish - tell me the exact date you're gonna die. "I don't know." Let me ask you something: What would be the safest way to make sure that your money lasts forever? Wouldn't it be to get rid of all the taxes on your money? So, if we were able to do that for you, wouldn't that be a good idea if you don't have to take any risks at all?

BIG SALES - $13,400 is a LITTLE sale. The next bracket is 10% bracket. the next $18,650; 10% is $1,865 tax dollars. $42,000 and divide it into $1,865 = 4.5%; $32,000 a year for 20 years; (65-85) that's $645,000 and only pay $30,000 in tax, would you do it? Or would you prefer to wait until you die and have the government take $300,000 of your $600,000? Now they give $32,000 a year; Annuity, MEC, or $32,000 a year in a life insurance policy. Over 10 years, $32,000 each year, you'll have $320,000 and got rid of all the taxes. This pocket is income tax free! And the IRS, nursing homes, wall street, government, hospitals could never get their hands on this pocket again; Magic door that every time you wanted access to this pocket, you didn't pay taxes on it... would you do it?
3:52:00 - Analytical question; most customers would never ask that; make sure your plan does everything behind the scenes.

3:53:45 - Biggest sale of all; $85,000/year life policy & $4 million DB managed by Van; 15% bracket; next $57,000 of income taxes at 15% = $8,200; Van Mueller rule of 99/15: If you add up all these columns, $23,400 + $73,900 = 15% bracket = $99,300 or less = 15% bracket. $50,000/year of income, couldn't I get another $40k, pay another 15% and get rid of taxes on $1.968 million and only cost you $200k of taxes? Do it with Life insurance, annuities, MEC, etc.

Pinney Insurance publishes Van Mueller's newsletter. Here's the one he referenced from February, 2017:
Pinney Insurance

 

[Golfnut2112]

But... he has a Series 6! You already said that he must not be trying to fit a square peg in a round hole! He must understand asset allocation, right? /end sarcasm

Even Guy Baker will tell you about -50% losses and needing 100% returns to get back to where you were. You know Guy Baker, PhD, MSFS, CFP, ChFC, CLU, etc., right? And he has written about investing and has an RIA firm.

This is Guy Baker guest-lecturing at Loyola University. I set the time for right when he's talking about risk tolerance and returns.

You post to many videos, if I were to watch them I would need to get a bag of popcorn and a six pack, no maybe a bottle of Rum. But anyway that’s what I said, a 50% loss requires a 100% return to get your principal back. I knew that without 10 designations!!! What I am saying is that the fear mongers use 2008 exclusively to scare people ( which is very sad considering how well the market has done over the past 35 years) instead of talking about risk tolerance, asset allocation and tactical money management they prefer to scare people and talk about life insurance as the ultimate end all savings vehicle. ( I will say this again, life insurance can be a good saving vehicle after a Roth is max funded, very rarely before). One commercial that drives me absolutely nuts is that bank on yourself.com which airs on sirrius radio, you talk about a fear mongering jerk off. Do you know anyone who actually loss 50% in 2008 who was working with an advisor? The only people I’ve met who lost that kind of money was in their 401K.

 

[Blr19]

The only people I’ve met who lost that kind of money was in their 401K.

Does make it any less significant? Or painful? That's why I'm asking about Permanent Insurance. So back to the original question:

Which would be better for cash accumulation with a 15 year horizon: Par WL or IUL? The plan would not be to raid it after 15 years, just have it available.

 

[Golfnut2112]

Two different products.The IUL will offer you flexible premium payments and a flexible death benefit, but the cost of insurance goes up significantly at older ages. WL offers less flexibility with guaranteed values and the possibility of dividends enhancing both the cash value and death benefit. With either one you should break even in 13 to15 years but if it were me I would go with a Max funded WL. I believe you stated you do not need the death benefit if that is the case you may want to consider a flexible premium indexed annuity set up as a Roth IRA . You will get tax free income without insurance cost weighing down your returns. I can’t believe it has taken 10 pages of comments before getting back to your original question.