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A Better Roth                                               

For many people, indexed universal life insurance (IUL) makes for a better Roth. A Roth IRA or a Roth 401(k) make sense for those who wish never to pay income tax on their retirement distributions. Foregoing the tax deduction on their contributions today are considered a good trade-off for getting tax-free treatment of the much larger payments received down the road. But Roth IRAs and Roth 401(k)s have several distinct drawbacks. 

  • Roth IRAs can only receive up to $6,000 in contributions as of 2019.
  • Roth IRAs are not even available to those who earn over $122,000 in 2019 ($193,000 for married couples).
  • Roths have no catch-up capabilities. If you fail to contribute the maximum allowable for this year, you can't add the shortage to next year's maximum.
  • Roth funds are virtually inaccessible prior to age 59 1/2 without a penalty.
  • Roth funds generally may not be pledged in order to achieve leverage for outside investments.
  • Roth investments are vulnerable to investment loss.
  • Any qualified retirement plans, including Roths, often need Target Date investment funds to reduce risk as one nears retirement age. This has can lower average investment return.
  • Roth accounts are not self-completing if you die or become disabled.

On the other hand, indexed universal life insurance (IUL) provides the following advantages:

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The Duplifund Group
The Duplifund Group