IUL vs 401K
What Distinguishes IUL From the 401K?
Unlike with traditional 401(k)s, The IUL is funded with non-qualified money, or after-tax dollars. So what you pay into IUL has been taxed already. That’s good news for future income – tax-free retirement income! IUL also offers the advantage of a tax-efficient death benefit for loved ones.
The index universal life policy is a worthy alternative to the 401(k), the IRA, the Roth IRA, and other investment strategies for your retirement fund.
What Are Some Other Key Differences?
Money within a 401(k) plan is exposed to losses to market downfalls
401(k) plans don’t let you borrow against them with the same flexibility as you might with IUL,
generally speaking
401(k) withdrawals before age 59.5 are subject to a 10% penalty and income taxation
Unlike with the 401(k), distributions from an IUL policy, when taken as loans, are non-taxable
Withdrawals from a 401(k) are subject to more substantial tax liability
There arelessrestrictions on contributions to an IUL policy than they are to a 401(k) plan
In the 2024 tax year, the contribution limit for a 401(k) is set at $23,000. THAT’s ALL!
With its contractual guarantees, IUL offers the benefit of preserving your earning power in your professional working years
Indexed universal life insurance can also becustomizedfor different situations: there are riders for chronic illness, work disability, and other specialized circumstances
And It Gets Even Better!
You can pour money into the IUL while other retirement options have restrictions on the amount of contributions you can make
You get life insurance thatcannotbe revoked
You cannot lose your principal to a recession When you start withdrawing money in retirement it’stax-free! The federal government cannot look at a steady $100,000 a year withdrawal from your IUL, combine it with your $32,000 Social Security income and declare that you are making too much money and tax your Social Security money
The IRS has no hand in your IUL pot. There is no paperwork, no filing. IUL does not exist
as far as the IRS is concerned.
The IUL is going to prove to you it beats traditional retirement strategies every time. So don’t walk into the “retirement casino” that has been beating you year after year. Build your OWN casino. You play the games YOU want and get some gains without losses due to a bad market. Walk out with your wealth in tact.
Copyright © 2024 All rights reserved. Legacy Army Financial Group