Remember one thing: Its not about how much money you have. It’s how much money you keep!
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Whole life insurance
- Thread starter jaxbusa
- Start date
Remember one thing: Its not about how much money you have. It’s how much money you keep!
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Tom has $60k.
Jerry may have ~$57.25 to $65.25k.
If my maths are correct, Jerry has the potential to be generating about 5 to 8% on his $300k which is $15-24k. Assuming Jerry wanted to withdraw this cash, it would be tax free.. his taxable income appears to be $55k, which at 25% leaves $41.25k. Add in $15-24k and Jerry has the possibility of surpassing Toms net after tax spending cash if I’m not mistaken.
Jerry may have ~$57.25 to $65.25k.
If my maths are correct, Jerry has the potential to be generating about 5 to 8% on his $300k which is $15-24k. Assuming Jerry wanted to withdraw this cash, it would be tax free.. his taxable income appears to be $55k, which at 25% leaves $41.25k. Add in $15-24k and Jerry has the possibility of surpassing Toms net after tax spending cash if I’m not mistaken.
I started a variable life insurance policy at 16. No clue if my state farm agent was lying or not, but he said since I started it at 16, I locked in awesome rates. Also, if I get married, she gets on at my rates too. I only needed to pay $5 a month, but it I were to pay $50 a month, something like I can cash it out for a projected 1 million at age 80...so I better last that long.
Also, I'm pretty sure that if you let a term policy lapse when it matures, if you elect to switch to a whole life policy, previous medical conditions become a factor in determining the cost of the new whole life policy. Whole life can get really expensive.
My insurance agent recommended that instead of investing in a whole life policy, put the money each month into my investment portfolio. I have a pre-existing condition which would raise my monthly whole life cost quite a bit.
My insurance agent recommended that instead of investing in a whole life policy, put the money each month into my investment portfolio. I have a pre-existing condition which would raise my monthly whole life cost quite a bit.
$50*12= $600 annually.
80-16= 64 years.
64*$600=$38,400.
It would take about 8.25% of growth annually to reach about $1,100,000.
Factoring inflation, $1,100,000 will be worth about $165,886.22
To have $1,100,000 in today’s dollars, you would need to end up with $7,290,000.
I would definitely put some more vehicles into play personally.
My plan is to retire north of $5m. Sounds crazy, but money compounds nicely. $5m 40 years from now will be about $1.6M today. Assuming I have it setup to return about 7% tax free, that will be right about $100k a year to live on in today’s dollars.
That said I am working towards having $25m to retire on, but there are no guarantees in life. My back up plan is to for sure have $5m separate of any other ventures.
You really need to put more money into that!
It all depends on the illustrated return versus the actual return. Variable life can be illustrated up to 12% ARR. I illustrated and base the ARR around 6%-8% and no less the Moderate for sub-accounts. Quick check on how it is doing: look at the illustration and compare what the cash value is supposed to be at your current age versus actual cash value. If the cash value is way above or around the illustration projection, your good. If it is way under the projection, I would run an unforced illustration with some parameters, like 8% ARR and same premium your paying now.
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