re: Indexed Universal Life Insurance

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If you had $15K-$30K/year to invest yearly for the next 20 years, what vehicle would you use?

Looking to spit off retirement income at year 20.

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First you should know how much income you will need annually at retirement and how long it will need to last.

You mentioned in your OP you'd like around $60k. If you retire at age 60 you may need 60k/year for 20 years and 35k/year for 10 years (lets say you live to 90).

60k x 20= $1.2 million
35k x 10= $350,000
Total= $1.55 million needed (assuming no inflation)

Now you need to know what kind of return you need to get on your $20k/year investment over the next 20 years to get the $1.55 million:

FV= 1,550,000
PV= 0
PMT= 20,000
N= 20
IR= 12.63%

If you changed the yearly payment to 25,000 your return would need to be 10.695%, 30k/year would be 9.09%.

In order to hit your retirement goal you'll need a 9-12% annual return. This example has a lot of assumptions but gives you a basic idea. You will probably need less than that total since it will continue to earn interest during retirement.


If the following is true and guaranteed:

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I would pay a yearly premium ($15-20K) for the next 20 years and then use the guaranteed lifetime income benefit to spit off $50K-75K of yearly retirement income starting at age 60.

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Then it's a great option for you.