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grinch1225 t1_iyelwna wrote

Using life insurance as a vehicle to have tax free income in retirement isn’t a red flag

The fact that they recommended “whole life” is a red flag. These have the lowest returns compared to indexed life (pegged to say S&P) and variable life which allows sub accounts for market investment

VUL’s (variable universal life) is exceptionally popular with my clients who want to save aggressively for early retirement. I’ve opened up 3 this week alone.

I would definitely recommend Roth be your investment of choice if not interested in life policies with investment options, as Roth money will be tax free when you do retire. And yes, that match is absolutely terrible.

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PAvibes t1_iyenuw1 wrote

Thank you for explaining that just my whole life is a red flag. Can I ask how much you put in monthly with one for your variable universal life policies? The financial advisor was recommending I put in 700 dollars a month into a whole life which seemed absolutely insane. When I did the math by the time I reach retirement age it showed crappy returns as you stated.

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grinch1225 t1_iyeohod wrote

It totally depends, as each client is subjective and requires a suitability assessment, I cant legally give a recommendation without it

I can say that the 3 I’m referring to are contributed as follows

$1000/mo, $1200/mo, and my largest is $4000/mo

In retirement (most of them want to be done by 50, 1 at 55) they’ll be able to pull between $209k per year, tax free on the $1000/mo investment, while the top end will net him closer to $500k per year tax free.

The rate of return for the calculations was 7.34% after fees and expenditures if I remember off the top of my head, but I cant guarantee that one. Could be 7.44%

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