In the world of retirement planning, life insurance, and investing there are two different schools of thought, and they are completely at odds. However, no matter what anyone says, it all boils down to this. Are you willing to risk your client's retirement money, or aren't you? Most will make the argument of risk vs reward, risk is necessary, etc. However, what if I could show you how to participate in 100% of the upside of the stock market, with none of the downside? Read further to discover how we take risk OFF the table, while still making great gains. Yes, have your cake and eat it too!
What is the point of having cake if you can't eat it? Seems like a silly phrase.
We specialize in being able to take risk off of the table, while giving you 100% of the upside of market gains. This way, our clients don't have to make up for losses when the market drops. This is called 'indexing'.
The policy is called "Indexed Universal Life", and it will beat your old school 401(k) plan like a drum.
We can use this policy to eliminate risk, create a massive asset, and even give you 300% more income at retirement. Oh, and if the S&P 500 index, or the Merrill Lynch proprietary index goes up 10% in a year, so does your cash value. If it goes up 50%, your cash value goes up 50%. If the index LOSES money, if it drops. Your account stays flat.
You see, in an IUL policy, your gains are LOCKED IN each year, and they become part of your original principle. It looks like this, below is a real number illustration over 17 years.
So how big are the gains?
Well, that depends on how well the market does in a given year. I can tell you that we've averaged 6-7%, while the S&P 500 has only had an ACTUAL Rate of Return of less than 4%....and 89% of financial advisors cannot beat the S&P in any given year. Think about this when you're giving your money to Edward Jones or money managers.
You have to look at the ACTUAL rate of return, not just the "average" rate of return, which is highly deceptive. Example:
Let's say your account value is $100,000.
It drops 50% because North Korea is being ugly. Now you have $50,000.
Next year, it regains 50%. Now the average rate of return would put your losses at zero, or back at even. But you aren't even. If your account drops 50%, bringing you down to $50,000 in value, then goes up 50%, you're only back up to $75,000. You're still 25% in the hole.
So, Average Rate of Return is just a lie, it's a myth, it's meaningless.
Now that we've eliminated risk to your principle, guaranteed never to lose money, and we're participating in much higher market gains, let's talk about fees.
What is your 401(k) charging you in fees? Do you know? Have you investigated it? This is pretty important for the growth of your money, especially since this money will be taxed in the future. I can tell you on average, that 401(k) TOTAL fees, including all of the hidden fees in mutual funds, etc, average around 3% per year. Now remember, the S&P 500 has only averaged 3.39% Actual Rate of Return over the past 18 years....and let's also remember that 89% of financial advisors cannot beat the S&P year to year. IUL policies are indexed TO the S&P or another index. Therefore, they go up with the index goes up, but don't get down when it goes down.
What are the fees covering? They are buying you the expertise of those managing your money. That's it. If you get sick, you get your money back after tax to pay your medical copay. If you die, your heirs get your money, after it's been beat to death with taxes.
What do fees cover with an IUL? The cost of insurance. Remember, we do not sell these solely as a safe place to put your money that will gain 100% of the market upside, with 0% of the downside. This is also an insurance policy with a death benefit, should it be required. If I were to hand your spouse a check for $1 million dollars, that costs money to provide that coverage. If I were to hand YOU a check for 90% of the death benefit, in the event of illness...that coverage costs money. However, your death benefit amount will always, 100% of the time, be worth more than the money you put into it, and it's tax free. Can your financial advisor say the same?
IUL has fees, and in total they will be pretty close to the fees of a financial advisor over 30 years. However, we offer you liquidity, safety, upside gains that are at least double that of the S&P over the past 18 years, and we offer you large checks.
In the illustration above, the client has $490,634 in assets in a typical money management account. His government 401(k) plan grows to an estimated $506,420 at retirement.
We illustrated apples to apples with what our IUL will do for him, vs his managed, risk based, account. We were able to project $52,841 in income, until age 120.
All things being equal, using his government backed 401(k) plan, he's out of money at age 71.
(fees illustrated until age 80 for IUL, and until runs out of money for 401(k)
Total Fees for 401(k) at 3%: $212,909 (no death benefit)
Total Fees for an IUL with a $1.4 million Death Benefit: $80,959
(btw, with our IUL death benefit, if he gets sick we'll give him a check for up to $1,260,000 tax free)
In every single illustration, we can get you 300% more income at retirement than your financial advisor can, and you will never run out of money. With every illustration, when they try to match the income we can provide our clients, the client runs out of money by their mid seventies. They CANNOT match us on income, on death benefit, on living benefits (up to 90% of the death benefit), or a tax free retirement until age 120.
Check out the illustration below, based on a $1 million death benefit IUL vs. a 401(k) with the same investment amount.
Let's Discuss How We Can Help You, It isn't Too Late, and Never too Early