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We look at cash value life insurance from double or triple rate mutual owned insurance company as a hedge to a clients port. I like this better than muni right now with interest rate rising. There is multiple reasons we do this strategy with High net worth families. The hedge never to lose value to offset downturns in Market is the best one, but it hard to find 5-6% tax free returns outside of life insurance.
Agree with first replier, specifically using a whole life survivorship policy with a dividend rider allowing for additional deposits as allowable. By using 2nd to die policy, it would minimize insurance costs. 5%+ year over year returns and accessibility to funds on tax favored basis. Bonus is the legacy it potentially leaves family. If insurance needed for income replacement, would then use individual policy(ies). This also gives investment protection as well, can show that it would lower risk and increase return of total portfolio.
You guys think a WL second to die policy is better place stash money than a cash balance plan? I have a 6 million 20yr term policy that has 17 yrs left and small 150k VUL.
Do you have an IRA or is it all 401k?
I haven't dealt with anybody who rollled an Ira back into a 401k plan but my understanding is if you don't have any pre-tax Ira basis you can contribute 5500 every year (nondeductible has no income limit) and convert it I mean it's not going to make it heck of a big difference but it beats putting the same amount in the whole life in my opinion at least until they change the law.
None for me. Additional 10k after tax bucket available in many plans. On top of your 18k pre-tax deferral. Keep it separate and convert it every December. I dont know your plan but it works for me.
GWK is a great muni manager. Don’t forget about the tax efficient etf portfolio
I would do a non-qualified brokerage account of index funds. It’s gonna be tax efficient. Some places have tax loss harvesting features if it’s that important. If it’s long term money you can also coordinate your accounts (401k’s and the non qualified account) to have the fixed income portion in the tax deferred accounts and the equities in the taxable account. It doesn’t have to be complex.
The income is 150k in W-2 income and k-1 is 200k
I have a VUL and put $400 a month into it, kind of a shitty one though. It's a nationwide policy and have had it for 9 yrs...
Everyone always says do a Roth conversion. I do want to try it just to make sure I know all the information for clients I try and do everything we recommend so that I'm familiar with it!
Yeah it would be interesting to see if the IRA transfer into my 401k would count? I doubt it, it would be difficult for IRS to track right?
Explain the after tax in 401k and the situations on how that bucket can be converted each year. I've seen this strategy before, but also heard issues around it.
CIC
CIC?
What are you trying to accomplish? What's your ultimate goal? Tax efficiency seems to be the obvious for now, but what about 15,30,50 years from now? When are you planning on retiring? Is your current income Sustainable, or sector specific? How important is legacy planning to you? There's really am enormous amount of unknowns to give you any type of specific planning. Honestly, any advice without knowing more, is not much more than simply selling products.
As a Deferred compensation consultant who helped write the tax code, I agree with the cash value product. Then it comes down to what you like as an investment. Whole Life provides guarantees and solid returns but based upon the insurance company that issues it. Indexed or Variable Universal life are based upon the performance of the investment that it is based upon. All three of them can be good. But your analysis should be about the "net" income from the policy "after tax" based upon either best performance or guarantees (depending on your needs). Unfortunately, there is no tax savings plan, other than maxing out a cash balance (as discussed earlier in this thread) for an S Corp owner.
I like the idea of using a max funded IUL blend with term to bring down the ins expense. I also recommend using Alternative investments such as land leases, oil and gas, programs that let you convert qualified to Roth on a tax preferred basis (great idea to create future tax free income with double digit returns). You are already investing funds in the market so do what endowment funds like Harvard and Yale do. We like to use the household endowment model and fully diversify into many non correlated investments. Don't put all you eggs into baskets that are all affected by the market.
P.S. I’m not a fan of IUL. If u understand the product, there is very little upside. The point to point module holding derivatives within the IUL reduces your return. I personally believe any IUL or Index Annuity is never in the clients best interest but only benefits the advisor selling them.
Currently looking at a 9 mo. Program paying 7.5%. Still doing my homework on it.
Most of the time ddp are lump sum, ranging from 25000 for a very small share all the way to multi-million. If your not in a large oil area check out the annual oil conferences. The largest and best is NAPE. It’s incredible, you can buy right there at the show, all size of opportunities. We haven’t be been looking for a long time because we have a network which I can’t disclose. You can IM me directly for additional information.
How about using premium financing on life insurance to maximize your gain and tax free income? We loan you the premium at 4%, and that may be a business write off.