『Is It Too Late to Start an IUL in Your 50s?』のカバーアート

Is It Too Late to Start an IUL in Your 50s?

Is It Too Late to Start an IUL in Your 50s?

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概要
 Picture a couple in their fifties. Good incomes. They did everything they were told. There's about $1.6 million in their 401(k)s and about $150,000 in Roth accounts. By any measure, they did it right. So here's the question. When they retire, how much of that money can they spend without sending part of it to the IRS? About $150,000. The Roth. And then somebody shows them an IUL video aimed at a 35-year-old, and they figure that ship sailed a decade ago. In this episode, Brandon and Brantley walk through whether it did. (The couple is illustrative.) What we get into: It's a tax-mix problem, not a savings problem. Most high earners we talk to in their fifties have a huge pre-tax bucket and a tiny tax-free one. Every dollar out of the 401(k) is ordinary income, and it can also raise your Medicare premiums, tax more of your Social Security, and stack up with required distributions later. The $45,000 car that costs $56,000. Pay for it out of the 401(k) at a 25% effective rate and you've added more than $11,000 to the price. Pay for it from the Roth and it costs $45,000. That's why we often treat the Roth as the emergency fund, not the income source. The deduction you took at 35. A lot of those 401(k) deductions went in on autopilot back when income was lower. Now you're at peak earnings, the tax bill is real, and you're realizing what retirement withdrawals will cost. If you're younger, heed the warning: Roth-style savings matter far more than the $500 deduction feels like it's worth. Why the usual fixes are small at 55. Roth contributions and backdoor Roths have hard caps. Life insurance has no income test and no IRS dollar cap (the tax code limits premium relative to the death benefit, not by your income), so it can hold a lot more. Our honest take on Roth conversions. We like them. Since 2010 anyone can convert, in any amount. But the converted amount is taxed as income that year, on top of everything else you earn, and it works best when you have money outside the account to pay the tax. Most people we see don't. You also have to live long enough and trust that tax law doesn't get friendlier. The benefit is real, and often more modest than the calculators suggest. That's a CPA conversation. Your clock is longer than you think. How long you fund the policy isn't what matters. When you'll take income from it is. If you need it within five or ten years, it's probably too late. If you fund it now and wait, the policy may work for you for decades. Your age changes the math in both directions. Insurance costs more per dollar at 55. But the tax law requires less death benefit relative to the cash value as you get older. Brandon recently ran a couple with an age gap. The younger spouse came out ahead, by a small enough margin that we called it a wash. Using IUL to de-risk. We're usually hesitant about moving qualified money into life insurance, since a Roth conversion handles the tax side. But an IUL gives you a kind of exposure a Roth invested the usual way doesn't, and for some people that may be worth it. When it really is too late, or just wrong. You need income within ten years. Your funding depends on a bonus you hope repeats. You haven't used Roth contributions yet and only have $5,000 to $8,000 a year to save. You'll truly be in a much lower bracket in retirement (we rarely meet that person). Or your health means the underwriting won't go well. The honest framing: the couple and every figure here are illustrative, and nothing in this episode is a quote. Income from an IUL usually comes as policy loans, which don't show up on your tax return as long as the policy stays in force. If it lapses with a loan on it, that can create a tax bill. Conversions, brackets and RMD planning belong to your CPA. Our lane is whether a policy can do this job, and how to build it if it can. It's not too late to start. It's just too late to start carelessly. ________________________________________________________ Everything in this episode is general, and your situation isn't. Want to see what a well-built policy would do with your numbers? Tell us a few things about where you stand, and Brandon will build a design for you and send you a private video walking through it page by page, within two business days. No call, no pitch. If it isn't the right tool for what you're after, the video will say so. In your fifties and asking about an IUL? Pick IUL in the form, and tell us what you could put in each year until you retire and when you'd want the income. Brandon will build it backward from the end, as we talked about today. Run my numbers. Want the risks before the numbers? We took the five biggest worries about IUL one by one: the caps, the illustrations, underfunding, the tax trap when a policy lapses, and the claim that most policies fail. Here's what the evidence shows. Read the IUL problems guide.
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