Selling Life Insurance...

[CHUMPS FROM OXFORD]

"...why should I not 401(k) at a minimum up to the company match?"

It still amazes me that some people "can't afford" to do that. Heck... by taking a cash advance on a credit card at 20% interest to invest in that scenario...you'll still come out ahead...IF you stay long enough to vest.

 

[Crabcake Johnny]

Are you forced to withdraw at age 70 for a Roth?

 

[bobson]

Are you forced to withdraw at age 70 for a Roth?

Nope, you aren't. But you lose access to the cash prior to 59.5 (except in a few circumstances). And with mutual funds you have no guarenteed floor. You can (and will) lose money if you invest in the stock market. You just hope you don't lose money right before you need it in retirement.

Self completion...


"But long term the stock market has proven ...blah blah blah blah." Tell that to Enron employees and some of their cohorts.

 

[bobson]

"...why should I not 401(k) at a minimum up to the company match?"

It still amazes me that some people "can't afford" to do that. Heck... by taking a cash advance on a credit card at 20% interest to invest in that scenario...you'll still come out ahead...IF you stay long enough to vest.

I'd love to see your numbers...

 

[Crabcake Johnny]

There aren't ways to withdraw from an IRA before retirement without a penalty?

 

[arnguy]

Who benefits from 401Ks the most? Do you ever wonder why there are more mutual funds then there are individual stocks? Do you know which industry pushed for the creation of 401K accounts?

"Do....there are more mutual fundsthan there are....stocks."

 

[Delta76]

Perm life? The client who's maxed the 401K, maxed the IRA, and can afford the correct DB. For "middle class America" take a guess as how many people that is.

There isn't a blanket assumption that will apply to everyone, this is why a complete fact finder is necessary. Burt Meisel has an interesting perspective on this subject, agree or disagree.

Why not buy a less expensive car and invest the difference?
Why not buy less house and invest the difference?

When you're at the car lot, does the car salesman tell the prospect to buy a smaller car because it will help him accumulate more for retirement?

Life insurance is meant for the death benefit, whether term or perm. If your selling it as a retirement vehicle, I don't think that is the correct way. All that being said, for me to sell permanent coveage, other than a final expense component, the client has to:

1. Fully meet their match on the company sponsored plan
2. Fully max out their Roth IRA
3. Have a need or desire for life coverage.

That's my approach. In the end, do right by the client and everything else takes care of itself.

 

[arnguy]

There aren't ways to withdraw from an IRA before retirement without a penalty?

Certainly, one of the ways is to reach the age of 59-1/2 without regard to employment status. Also, there are exceptions to the age 59.5 requirement if the funds are used for qualified schooling expenses (can be for yourself, spouse, children or grandchildren). Another exception is for first time home buyers----can withdraw up to 10K, if married that allowance is doubled to 20K (the buyer can be yourself, spouse, one of your children, grandchild, or parent).

 

[Crabcake Johnny]

Can withdraw if:

permanently disabled
non-reimbursed medical expenses for serious injury/illness
college costs
1st time home purchase
paying health insurance premiums if out of work longer than 12 weeks

the bottom line is some life agents make IRAs out to be investment vehicles "you can't access until retirement" when in reality there are many ways to access they money when you need it.

 

[James]

Can withdraw if:

permanently disabled
non-reimbursed medical expenses for serious injury/illness
college costs
1st time home purchase
paying health insurance premiums if out of work longer than 12 weeks

the bottom line is some life agents make IRAs out to be investment vehicles "you can't access until retirement" when in reality there are many ways to access they money when you need it.

I suppose we should all bend down and wear Ashes and Ashcloth in our thanks to the Government and Securities Industry. Gee, there are exceptions!