Here’s a few other really smart tax benefits: 1.) There are no taxes when you die. 2.) There are no taxes when you pass the money on to your family. These make the IUL a really powerful tax-free wealth building and retirement tool.
Safety of Principal. Your money is not invested in the Stock Market and as a benefit your money is never subject to market volatility, investment risk or principal reduction due to a market downturn.
Remember this!
“When it comes to retirement and long-term financial planning you should focus on income and capital preservation, not just a big nest egg”!
Here’s an example: Let’s say you have $1,000,000 in a market-based investment account and according to what many financial advisors have been recommending since the early 90’s, 4% is the standard withdrawal rate, equaling $40,000 but remember that is before taxes. At a 21% tax rate your income is down to $31,600 per year, or just over $2,600 per month. But what happens if your account goes down 20% like so many people experienced in 2022. Now at $800,000 and at 4% it’s at $32,000 before tax and $25,280 after tax annually.
So, if you have part of your retirement money in an Index IUL account you would never experience that market-based volatility, investment loss or income loss in retirement.
Here are my top 9 reasons to have the IUL in your portfolio:
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Photo Credit Henri Pham