Did Donald Trump leave us a golden egg for retirement savings before he left office?
The secret retirement income vehicle of the ultra-wealthy – the Indexed Universal Life policy or IUL - just got more affordable and even more tax-free.
With all the publicity around parliamentary bills and what is and is not included, you may have started to realize that our politicians often use sensation-bills like the Cares Act and other big legislative or policy changes that attract a lot of attention, to provide cover while they slide in un-noticed the things they really want.
One such change that was passed under cover of the Covid Relief Bill on December 21st was what seemed like a very minor update to IRC Code Section 7702. IRC Code Section 7702 regulates the sheltering of funds from taxation within life insurance policies.
The amendment reduced the minimum guaranteed rate that insurance companies must provide on whole life policies from 4% to 2% due to the current economic climate. This in itself seems harmless; however, the result means a lower cost of insurance to the insurance companies for whole life policies and allows more of your policy premiums to be invested for growth and returns. Conversely, there was also an inverse increase on how much one can accumulate within a life policy before the policy hits MEC (the point at which growth becomes taxable). Industry experts believe that cap will be about 100% higher for new policy vehicles created based on the new cost structure rules. Note: existing policy and cost structures cannot be changed.
So was this a golden egg left by Donald Trump intended for the wealthy? Potentially so. This legislation was included at the same time as payment of stimulus checks to high income earners was taken out. And IULs are a favored retirement investment vehicle of politicians and the ultra-wealthy. This small gift will provide IUL owners with much larger retirement income returns and tax savings than a few thousand dollars in stimulus checks.
Used the right way the savvy retirement investor can now be millions of dollars better off, leaving even more in generational wealth to their children.
The good news is that with knowledge, anyone can take advantage of this kind of investment which provides both tax-free growth and tax-free retirement income with no downside, even when the market falls.
If you are interested in a no-pressure conversation and to see a side-by-side comparison of how much additional retirement income you could receive from an IUL versus your 401K, you can schedule time on my calendar for a financial goals chat here.
Imagine having your own personal bank. A bank where you’re the depositor, the borrower, and even the lender. Sounds too good to be true, right? Well, this concept is very real and incredibly powerful. It’s called Infinite Banking, and it’s made possible by something called a cash value life insurance policy.
Now, don’t worry—if you’re not familiar with financial jargon, I’m going to break it down for you in simple terms.
The 401(k) plan, a familiar term in American retirement planning, has undergone significant changes since its inception. While it’s known for helping employees save for retirement, there's more to its story. This article aims to unpack the various aspects of 401(k) plans, examining the roles of fees, employer contributions, government taxation, and more.
Credit cards can be double-edged swords. While they offer convenience, they also tempt consumers to incur debt that can spiral out of control. However, when used judiciously, credit cards can be powerful tools in bolstering your credit score and earning you valuable rewards.
Who said retirement was supposed to be a countdown to just sipping lemonade on the porch? In today's fast-paced world, it's about so much more. It's travel, leisure, hobbies, and yes, even those unexpected costs that sneak up on us. Traditional views of retirement savings? They're evolving, and it's high time we step into the new age of planning for those golden years.
The process of purchasing life insurance essentially involves transferring risk from you to an insurance company. You're passing off the risk of your life, income, and the financial well-being of your loved ones being impacted by your death, critical injury, terminal illness, or chronic illness to the insurance company. In return, if the unfortunate event covered by your policy occurs, the insurance company steps in to provide financial compensation as agreed upon in your policy. This financial safety net ensures that your family's financial future remains secure even if you're no longer there to provide for them.
Have you ever pondered over the financial strategies of the wealthiest families? What are the secrets that have helped them maintain and grow their wealth generation after generation? Today, we're delving into one such financial powerhouse: The Rockefellers.