What I want to talk about today is how to set up a comprehensive retirement plan using insurance products.
I’ve been in this business a long time. I’ve seen it work. I’ve seen it work, personally. Insurance products are probably the safest vehicles that you can have , for current situations, but certainly when you get into retirement planning. Many folks have a 401k We’ve talked about 401(k)s before don’t want to get off on a tangent, but you know, there’s some strings attached on 401(k)s plus it’s it’s exposed to the market.
We’ve talked about the value of using life insurance in retirement planning. There’s some tremendous vehicles out there that offer you the opportunity for for a very. Nice return with no exposure, with no loss, no, no exposure to the market. And you combine these vehicles and it can put you in a situation where you can have a very comfortable again, it depends what we’re starting with, but a very comfortable and safe and secure retirement income flow.
So let’s just take one of the vehicles that I like the best, these are FIAs. FIAs are vehicles that you will never ever ever ever ever lose a penny. You can take advantage of the market, but you will never subject, be subject to any kind of downturns in the market. So you can look at the potential of this plan and feel very secure because you’re not going to have to wonder what if the market drops 10, 20, 30 percent that we’ve seen in the past.
I’ve had clients that have lost 30, 40 percent in their retirement savings. That’s real money. You know, they say, well, it’s on paper. No, it’s real money. You know, just ask the person who lost that. So FIAs, you’re not going to have that worry. You’re not going to have that concern. And you can turn on FIAs that would provide you with a guaranteed income for life. So again, let me repeat that. Guarantee income for life. So what that means, the insurance company’s gonna say, okay, you’re gonna put 500,000 or a million dollars in here. We’re gonna pay you out X. All right, we’re gonna, you know, it depends on your age and so on, and it’s gonna pay you every month, month in and month out, as long as you are alive, even if there’s no more money in that account.
Even if you’ve lived 30 years after putting that money in there and you’ve pulled that out. And I’ve seen it work. I’ve seen, I’ve been in this long enough that I’ve seen people that have had these accounts for 20, 30 years. And when you did the math. The value in the account is still pretty substantial.
It might not be equal to their original investment, but they may have pulled out two, two and a half times and still have money in that account. So FIAs are very, very good vehicles. I have a lot of folks that will convert their 401(k)s or Roth IRAs to an FIA. Then you have insurance, you have insurance and you have what are called iULs. And these are products that are life insurance products, but the focus on it is growth. So not to get into detail with these, but what happens is when we advise someone the value of having a IUL what happens is the insurance company, we squeeze the death benefit down as small as we can and maximize the amount of premium that they can pay, which is kind of counterintuitive.
You know, you think, well, with life insurance, I want to get the most death benefit that I can for the money I’m paying. Well, with an IUL, you know, folks are looking at this life insurance part, the proceeds part is kind of secondary. It’s about cash accumulation. So you have that cash value growing tax free, and if you were to happen to pass away before that that account is going to, is going to mature, and your heirs are going to receive the death benefit tax free.
But you can grow that and then turn on income, and you can turn that on at any time. And that’s the thing about FIAs and IULs. The government doesn’t have their hands in those things. You can turn them on, turn them off, take a loan, take all the cash out, do whatever, and not be subject to taxes.
And you can do it at any age. So again, you understand that with a 401k, you can’t touch it without a penalty until 59 and a half. You gotta start taking it out at 70 and a half. It’s subject to the market, the government’s going to get their money with IULs and FIAs, those are owned by insurance companies. You have the downside protection where you’re never going to make less than zero. And you have that potential, as I said in the FIAs, that you could turn on income on those products and it will pay you for the rest of your life. Again, like, if you liked what you heard here and you want to know more and see if it applies to you or maybe your parents, just reach out to us at FinancialProf.Org. This is Mike Sheehan and until next time, make it a great day.
