Has anyone used a cash cumulative Life insurance policy as an additional avenue to save/invest for retirement? Assuming you have maxed 401k contribution, post tax ira, stocks, investment property, etc

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As insurance, it's more expensive for the same payout. As an investment, it's got lower risk-adjusted returns than a portfolio of stock and bond index funds.

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Pros/cons?

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It's not worth it. If you actually need life insurance (i.e. someone is depending on your income) then get a term policy and invest the rest in a taxable brokerage account using low-fee index funds.

For Accenture, you can also put 10k into an after-tax, non-Roth 401k bucket and then roll it over the same year into a Roth IRA. This is called a "mega backdoor" technique, and most 401k plans don't allow for it.

Also, if you choose one of the HDHP insurance plans, you can max out an HSA and pay your medical expenses out of pocket, and invest the HSA and use it as another retirement account.

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Opportunity cost can hurt a lot. You can compare yours with other portfolios using the online Portfolio Visualizer tool. If you've held it for 20+ years then at this point it may make sense to stay in it, or maybe not. It's good to do the math for oneself and not rely on the salespeople, who have conflicts of interest.

As a legacy for heirs when you have a very illiquid estate (family business, etc.) then a whole life policy can make sense to get into. For most people, it doesn't. But it's a very profitable product for those who sell them.

If you're wealthy enough not to care about sub-optimal returns, you're in a very good position and you should feel good about that.

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SC1, why not worth it? Whole life is way better than term, assuming you can afford the payment.

SC1 maybe you're looking at the wrong product then. Assuming a long term view (20+ years) my rate of return (including premiums) is far better than average index fund performance.

I do it, but it's more of a wealth preservation vehicle if you have kids than wealth accumulation. During the last downturn I took a loan against it as opposed to my investments. The flexibility it provides can be worth it for some people, but not most.

For a 20+ year time horizon, holding a majority of equities instead of bonds is appropriate. Stock market index fund VTSMX has had an average annual return of over 9% since its inception in 1992. I'm skeptical that any whole life product has or will beat that.

Maybe my calculations are off. $1250 a month for 32 years with a death benefit of 850k and a cash value of 875k. Pretty good return if you ask me.

I'm still not understanding what is sub par about an 8% return (assuming about 3% inflation) including the protection of a death benefit.

By my math, investing 1250/mo for 32 years with an 8% rate of return, you should end up with over 2 million.

The death benefit could have been had for way less using a term policy. For someone who uses a term policy instead of whole life and invests the difference, by the time the term ends, then a) the need for life insurance is likely less (children started their own careers, mortgage paid off, pensions / social security / medicare kicked in, etc.), and b) the portfolio would likely be bigger and make for a better inheritance.

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