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re: Buy term invest the rest. Not so fast!
Posted on 12/24/24 at 9:16 am to XenScott
Posted on 12/24/24 at 9:16 am to XenScott
quote:
Properly set up whole life has its place. If you are self employed, max out deferred, and make too much to Roth.
This is exactly how you can tell that all of the haters don't even have the money to consider whole life.
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Posted on 12/24/24 at 9:30 am to La Place Mike
So the gist is to direct a bond allocation percentage into these insurance products? Seems a bit disingenuous since the cash value will probably be indexed and get market returns vs fixed income returns.
They should compare that to 100% tax deferred stock market only. shite loads of volatility there but it would be a more accurate comparison.
I’m sure you can come up with scenarios where it makes sense given specific conditions but over time I still have a hard time accepting the returns on an insurance product out pace the market after the margins and risk premiums are pulled from the equation….vs just plowing that same amount into the S&P over 20 years….especially once you get to the age where maxing your tax deferred or Roth investments becomes a real possibility.
They should compare that to 100% tax deferred stock market only. shite loads of volatility there but it would be a more accurate comparison.
I’m sure you can come up with scenarios where it makes sense given specific conditions but over time I still have a hard time accepting the returns on an insurance product out pace the market after the margins and risk premiums are pulled from the equation….vs just plowing that same amount into the S&P over 20 years….especially once you get to the age where maxing your tax deferred or Roth investments becomes a real possibility.
This post was edited on 12/24/24 at 9:31 am
Posted on 12/25/24 at 5:24 pm to SquatchDawg
It’s a tax dodge. If you’ve maxed out deferred, a taxable account is just that, taxable.
Posted on 12/25/24 at 6:25 pm to XenScott
quote:
Properly set up whole life has its place. If you are self employed, max out deferred, and make too much to Roth.
I'm not totally disagreeing with you.
However it takes 5 minutes to back door Roth
Posted on 12/25/24 at 9:20 pm to UltimaParadox
Article is accurate. They achieved their goal of using nonsensical products/asset class comparisons to prove a self serving point. They had to reverse engineer so many variables to get to the conclusion that they wanted and the details are so buried and so far over the head of the average investor that most won't go past their conclusions.
Glide paths suck for most investors. They are a CYA, set it and forget way to invest.
Glide paths suck for most investors. They are a CYA, set it and forget way to invest.
Posted on 12/26/24 at 7:04 am to XenScott
quote:
Properly set up whole life has its place. If you are self employed, max out deferred, and make too much to Roth.
Even then it’s a maybe.
Posted on 12/26/24 at 7:31 am to slackster
"Investing" in a tool that is so complex that the person with the money won't understand it....should be a fatal flaw to any product.
Posted on 12/26/24 at 11:05 am to La Place Mike
We probably could simply go with, whole life is not for everyone, but useful in some situations.
Maybe the top 5% to even think about it. Simplicity is sometimes the best path for many to ensure they are maximizing what they have and not getting lost in complexity.
quote:
The top 1% of net worth in the U.S. in 2025 will have $11.6 million in net worth
The top 2% will have a net worth of $2.7 million
The top 5% will have $1.17 million
The top 10% will have $970,900
The top 50% will have $585,000
Maybe the top 5% to even think about it. Simplicity is sometimes the best path for many to ensure they are maximizing what they have and not getting lost in complexity.
Posted on 12/26/24 at 1:29 pm to UltimaParadox
The benefits of my variable life insurance is solely because of tax yields. That money is protected and cannot be taxed.
Posted on 12/26/24 at 2:37 pm to SaturatedPhat
quote:
What about the market crash right before your retirement?
What major effect is a market crash before retirement going to do with anyone that has recommended allocations?
So lets say you are 40% equity and 60% fixed income, which is probably average allocations in that half the people are more conservative and half less.
Market crashes 50%, you just lost 20% of your money temporarily.
Now lets talk about a crash. How long have crashes lasted in the past? 2-3 years on average?
Where people get hammered is not by a crash, they get hammered by selling everything low after a crash instead of leaving the money in.
The solution is to have some savings for 1-2 years. Be diversified. Then be patient. Its very simple.
There's really no excuse TODAY to lose a lot anywhere around retirement, when you can ladder fixed income and get 4-5% for the next 10 years in fixed income. Anything in the market really should be gravy in regards to money for retirement. IMO
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