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LEAP is so much more than WL or avoiding taxes. Just like anything else, there are great practitioners, good ones, and evil ones. The great LEAP practitioners use it as a process, not simply to sell big WL policies.
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no. they are just smart enough to realize that they can get a better return on their money by not putting it into a wl.
why all these personal attacks. it's very simple math.
just do the math.
2% state income tax? The average state income tax by the gainfully employed population is around 4%-5% per CBO taxation studies. But I will use your 2%...
OK. Since 77% of dual income households earn around 90K/ year I will use 25%...
....and I did use a 1% MF expense in the 401k example. The other 1% is from trails the broker gets paid and admin/maintence fees; these are associated with all 401Ks. Thus a 2% reduction.
401k @ 27% tax (25+2)= $285K
@ 22% tax= $304K
@ 17% tax= $324
Universal Life= $327.8K
That would be a 42K difference for 77% of american households...
So I think that I have established that for even middle class and lower class people, it is more efficient to contribute to a UL instead of contributing past the match in a 401K....unless your working with a married couple that makes less than $16.5K between the two!!
Plus your risk is significantly less, and you have guaranteed protection of your principle!
The math holds true for a traditional IRA as well for the 20% & 25% brackets.
I dont have the math handy for the roth comparison, but it does get closer to being equal. (Im a big fan of roth if you can do it, not getting hit on the large lump sum that has grown, usually far outweighs any immediate pre tax advantage)
But a roth is still not addressing the clients risk. If you are diversifying your clients investments you will have some of the bond funds and MM funds thrown in there....and I dont care how you go about it over an extended period the UL will beat the after tax...and even before tax amounts of these low risk investments. So bottom line a WL or UL is an excellent low risk investment. An IUL or VUL is a viable option for the client more prone to risk.
If I where to compare apples to apples as far as risk goes, the IUL & VUL will far outshine even mutual funds in a brokerage account. And I havent even hit upon the difference in rate of return to heirs!
I understand the socratic method... i dont remember the exact context to all your comments at the moment so I will take you at your word as to your intentions. But you did make multiple comments about the product that are not true....
Example: you just claimed WL has "hefty loads"
WL has a policy fee, admin charges, and a cost of insurance associated with it...just like a term policy. These three items actually cost less inside a PI policy than in a term. In otherwords a term policy might cost 50 cents per 1K in DB. But a PI would cost 40 cents per 1k. The overage that you pay is good faith that the company will return it to you plus dividends or interest. So you actually pay less per 1K in DB, plus you get all the other advantages. This is why I can design a UL for someone 60+, guarantee it until 90 or 100, and still beat term rates most of the time.
PI is also forced savings since it can be bank drafted. This is something that both SO & DR are fans of, and something that the majority of americans could benefit from...even if it was just to a simple savings account...lol
SO & DR are glorified debt counselors who have both been bankrupt before. And both have multiple disclosures before after and during their shows, and inside their books, about how their opinions are for entertainment purposes and that they are not qualified financial advisers! Think if I did that at the beginning and end of my meetings with clients!
You have to read the fine print. And when you do, read up on the non disclosed fees inside most all mutual funds which can be up to 4bps each....its probably on page 117 paragraph II, subsection Q of the funds prospectus...if its in there at all... hence the term non-disclosed!
Good luck to you.
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Oh. and we wont even bother doing the comparison of the values of a WL or UL vs. a CD, MM, or gov Bond (3 things you claim perform better than WL) since I have already made my point against higher yielding products, plus the WL has tax deferral and better rates!
For those of you that keep up, the treasury just auctioned off 20y notes at 2.2% last week!..... "hey, invest in this and not keep up with inflation!"....lol...
in case u werent aware of it, 401ks and iras are tax-deferred. you need to apply the compounded tax deferred growth before taking out the taxes.
try those numbers again.
He did genius. $10,000 a year, at a net of 6% is $389,927.27. He rounded it up to an even $390,000. Don't be upset just because Dave and Suze aren't always right.
the reason people don't trust insurance agents is because you guys are a master at the shell game. this thread is a perfect example.
77% of Americans would be much better off keeping the $390K in the 401k, taking the RMD's and paying tax on the RMD's, than they would having whatever your PI might have grown to.
77% of Americans would be much better off keeping the $390K in the 401k, taking the RMD's and paying tax on the RMD's, than they would having whatever your PI might have grown to...
..then calculate the lower tax rate for the couple after they retire. then reduce the fees on the 401k after they roll it over. then calculate the tax only on the amount they withdraw...
the reason people don't trust insurance agents is because you guys are a master at the shell game. this thread is a perfect example.
77%?! Where the hell do you get your statistics? That seems made up.