Adding an Index Universal Life (IUL) policy to your portfolio can be a smart and strategic move for anyone looking to accumulate wealth and increase their income during retirement. As any financial adviser will tell you, the sooner you start planning for retirement, the better. Whether you are 30, 40, or 50, now is the time to get serious about your future financial well-being.
There is nothing wrong with investing in a Qualified Retirement Plan (QRP) like a 401K or an IRA, but it may not be enough to ensure a comfortable retirement. While you do enjoy tax-deferred growth — and in the case of a Roth IRA, tax free withdrawals — standing alone, these plans may not be enough to fully meet your retirement goals.
Limitations on Qualified Retirement Plans
- You must have earned income to establish an account.
- There is a limit on the annual contribution amount.
- Early withdrawal (before age 59.5) can result in a tax liability and a 10 percent penalty.
Index Universal Life Policies
There are many different types of whole life insurance policies that you can buy and they all contain both an insurance component and a cash value component. Part of your monthly payment goes toward insurance and part goes toward savings. With an IUL policy, the cash value component is tied to the performance of a broad index such as the S&P 500. If the stock market does well, you earn a percentage of the index’s gain in the form of interest. While there is no guarantee that the stock market will go up every year, you are guaranteed not to lose any money. Many policies contractually guarantee a minimum rate of return no matter how the market does.
Features of Index Universal Life Policies
- No limit to how much you can invest.
- Savings grow in a tax-deferred account.
- Allows you to keep your principal safe and lock-in gains.
- Able to borrow through interest-free and tax free loans during your working years.
- Create a guaranteed stream of income for life when you retire by adding a rider and taking tax free loans. Loans are eventually paid back through your death benefit.
- Tax free death benefits to your heirs.
- No Loss from Market downturns.
- Higher caps than index annuities
Is an Index Universal Life Policy for You?
As more-and-more people are becoming actively involved in their own retirement planning, the popularity of incorporating an IUL policy into those plans is spreading. There is real value in having a single plan that can provide life insurance for your family as well as a safe way to build savings for your retirement. While terms of an IUL policy can vary by individual and the insurance company that offers the policy, it is quite possible to earn 10 percent or more in interest when the Index does well. If you have a 10-year, 20-year, or longer time horizon before you retire, an IUL policy can easily be an income doubler.
At Advanced Capital Management. Inc. we know that you have many choices for your insurance and retirement needs. An Index Universal Life Policy may meet those needs. It costs nothing to get more detailed information; click on the “Get IUL Quote Button” and get help from the experts at Advanced Capital Management, Inc.