Roth IRA on steroids

May 11, 2019

  1. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    DHK, May 14, 2019
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  2. pfg1
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    pfg1 Guru

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    Sounds like it was not max funded. What if it had been $125k in CV?
     
    pfg1, May 14, 2019
    #22
  3. Golfnut2112
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    Golfnut2112 Guru

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    It’s not the amount of the policy it’s the insured occupational class that determines length of benefit.
     
  4. Golfnut2112
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    It still would not have been good. $600 invested in the Putnam equity income fund since March of 2006 would be worth $186,895. So by him investing in life insurance instead of a REAL retirement plan it cost him almost $100,000 in 13 years.
     
  5. Golfnut2112
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  6. pfg1
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    Right, it shouldn't be compared to investing or used as a replacement for investments. That is the error the agent made. (Caveot being someone who is 100% against risk or the being in the stock market).

    But none the less, he's about $30k short in the CV due to policy design or funding. That same amount of money "should" have been much more effective for him.

    The good thing about these plans if designed correctly, they get better and better each year. Many times by year 20 the cv growth is double the premium payment, no risk. And the DB rises each year.
    Should be used WITH investments, not instead.

    Time to help that guy set up a Roth! The life policy will roll along well now, should be very efficient at this point. Also, you might check and see if he is max funding the pua's with the design. There could be addl room which would ramp up the effectiveness of it.
     
    pfg1, May 15, 2019
    #26
  7. pfg1
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    The other thing is... we always have the luxury of hindsight. Depending on when we look at something like this -it skews it. Since we've been on a massive bull run it looks alot worse. Had the market been on a big downturn, it wouldn't have looked nearly as bad...especially if it was max funded. Not justifying it, just sayin.

    Again, it shouldn't be compared by insurance or investment folks... yet its always done.
     
    pfg1, May 15, 2019
    #27
  8. Golfnut2112
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    He’s actually coming in Friday. We are going to call and get two in force illustrations one using current payments and one as a reduced paid up. You are right he should have done a little better.
     
  9. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Of course, your own ideas of where investments will be going should enter the conversation.

    Retirement Planning Ain’t What It Used to Be | ThinkAdvisor
    https://www.crestmontresearch.com/docs/Stock-Waiting-For-Avg.pdf

     
    DHK, May 15, 2019
    #29
  10. Golfnut2112
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    Golfnut2112 Guru

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