The client is 30 years old and looking for a way to get a better return on a languishing 401k. He has siblings with similar concerns that are also contributing to 401k’s and are realizing they are not making any headway with their investment strategy. They all have current mortgages on their properties with very little equity established.
They are concerned about leaving these investments in such a volatile market and would like more safety and security. The clients also have current 401(k) balances of $12,000, $22,000, $17,000 and $33,000 respectively and are contributing between 4 and 10% of their salary for a total combined monthly contribution of $3,083.
For this case we proposed a plan that is utilizing a guaranteed UL life insurance policy with a $1 Million Death Benefit on their 66 yr old father (who is standard – non tobacco) using the non-matched 401k contributions. Since the oldest sibling is 30 yrs old and won’t need his retirement funds for 35 yrs, the likelihood of the father being alive at that point is EXTREMELY small.
The monthly premium for this policy is $2,375 as long as the father is alive.
The siblings are able to be the owners and beneficiaries of the policy while the father is the insured.
Insurance death benefits are tax free to the beneficiaries in this example. Compare that to the uncertain return of the 401k and the certain taxation and this strategy FAR OUT-PERFORMS the 401k even if the insured lives for another 35 years. Analyze the rate of return from year 1 through year 35 of the plan. The numbers are staggering.
It may sound morbid to bet or bank on the life expectancy of a loved one but the reality is that none of us are getting out of here alive. In this case the father was more than willing to do this as he had always wanted to leave a legacy behind for his children but wasn’t able to because of unforeseen events such as hurricane Katrina. Now, upon his passing, his siblings will enjoy the memory of their father with $1 Million Tax Free Dollars!
Please call me to discuss your situation and our design team will custom tailor a strategy that will likely save you thousands in taxes and perhaps make you a millionaire sooner than later.
Cordially,
J. Michael Nash
Financial Strategist
The Michael Nash Group
1911 Rio Grande
Austin, Tx 78705
(512) 494-0300 office
(512) 494-0301 fax
(512) 731-8818 mobile
"Good, Better, Best! Never let it rest! Never let it rest until GOOD gets BETTER and better gets BEST!"
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