Select how you'd like to explore your retirement strategy
Let's start with what you want. Answer these simple questions to build your personalized retirement plan.
To guarantee your income without relying on market luck, here is the raw math.
Note: This is a baseline calculation showing the power of compound interest. In the next step, we'll see how taxes affect these numbers in traditional retirement accounts versus tax-free accounts.
Traditional accounts (401k, IRA) are tax-deferred, not tax-free. You'll owe taxes when you withdraw.
To NET $50,000, you must withdraw:
To NET $50,000, you simply withdraw:
Great question! Roth IRAs are excellent for tax-free retirement income. But let's look at the numbers...
| Feature | Roth IRA | Tax-Advantaged Strategy |
|---|---|---|
| Tax-Free Growth | ✓ Yes | ✓ Yes |
| Tax-Free Distributions | ✓ Yes | ✓ Yes (via policy loans) |
| Annual Funding Limit | ✗ $7,000/year | ✓ No limit |
| Access Before Age 59½ | ✗ Penalties on earnings | ✓ Tax-free loans at any age |
| Downside Protection | ✗ No (market risk) | ✓ Yes (0% floor) |
| Death Benefit | ✗ No | ✓ Yes (permanent protection) |
Personalized Financial Illustration
See the shocking difference between Tax-Advantaged Strategy loans and Roth IRA withdrawals over 35 years.
Hypothetical Illustration: This illustration is hypothetical and educational in nature. It is not a guarantee of future results, investment advice, or a recommendation to purchase any specific product. Values shown are based on assumptions including rates of return (which may vary significantly), scheduled premium payments, current tax laws, and policy charges. Actual results will depend on market conditions, product selection, policy performance, individual circumstances, and timing of contributions and withdrawals.
Life Insurance Product: This strategy utilizes cash value life insurance, such as an Indexed Universal Life (IUL) policy. Policy loans and withdrawals may reduce the death benefit and cash surrender value, and may cause the policy to lapse if loans and withdrawals exceed available cash value. A lapsed policy could result in significant tax consequences. The tax-free nature of policy loans is based on current Internal Revenue Code Section 7702 and applicable regulations. Changes in tax law could affect the tax treatment of policy values.
Rate of Return Assumptions: Illustrated growth rates are hypothetical and for demonstration purposes only. Actual returns will vary based on index performance, policy crediting method, participation rates, caps, spreads, and other policy features. Past performance does not guarantee future results. Index-linked interest crediting strategies do not participate in dividends and may be subject to caps and other limitations.
Premiums and Fees: Illustration assumes all scheduled premium payments are made as shown. Policy charges including cost of insurance, administrative fees, premium loads, and other expenses will reduce cash value accumulation. Charges may increase over time and vary by policy and insurance carrier. Early policy years typically have higher charges relative to cash value.
Tax and Market Risks: Changes in federal or state tax laws, including but not limited to income tax rates, estate tax rules, and the definition of life insurance under Section 7702, could significantly impact policy values and benefits. Market volatility, economic conditions, and insurance carrier financial strength can affect policy performance. This illustration does not account for inflation or changes in purchasing power.
Insurability Requirements: All life insurance policies are subject to underwriting approval. Policy issuance, premium rates, and available face amounts depend on the applicant's age, health status, medical history, lifestyle factors, and other underwriting criteria. Some applicants may be declined coverage or offered coverage at higher premium rates than illustrated.
Not Financial, Legal, or Tax Advice: This illustration is provided for informational and educational purposes only. It does not constitute legal advice, tax advice, investment advice, or financial planning advice. No fiduciary relationship is created by viewing or receiving this illustration. You should consult with qualified tax advisors, attorneys, and financial professionals regarding your specific situation before making any financial decisions.
Insurance Product Disclosure: Life insurance policies are issued by licensed insurance carriers and are subject to the claims-paying ability of the issuing company. Policy guarantees and benefits are backed by the financial strength of the insurance carrier. Life insurance products are not insured by the FDIC, are not deposits or obligations of any bank, are not guaranteed by any bank, and may lose value. Not all features and benefits are available in all states. State-specific variations may apply.
Licensure and Authorization: This illustration must be presented by a properly licensed insurance agent or financial professional. Product availability, features, and benefits vary by state and carrier. Any purchase of life insurance should be made only after careful review of the policy contract, including all provisions, exclusions, limitations, and riders.
Proprietary Calculation Methodology: This illustration was prepared using proprietary financial planning software and calculation methodologies. Results may vary based on the specific assumptions, timing, and methods used. For questions about the calculations or assumptions used in this illustration, please contact your licensed insurance advisor.
Forward-Looking Statements: This illustration contains forward-looking projections based on current assumptions. These projections are subject to numerous risks, uncertainties, and other factors that could cause actual results to differ materially from those projected. No assurance can be given that future results will match the assumptions or projections shown.
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