401(k) replacement, Living Benefit Life Insurance, Tax-Free IUL, Tax-Free Pension Alternative

What Would You Choose, a New Boat or a More Secure Retirement?

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What Would You Choose, a New Boat or a More Secure Retirement?

Tax-Free IUL vs. Boat Purchase. What’s The Opportunity Costs?

Opportunity Costs of boat purchase vs. Tax-Free IUL $17,509 a year in tax-free retirement income, You would need $583,000 in a 401(k) or an annuity to generate the same after tax income. Would you choose the boat or the more secure retirement?
Opportunity Costs of boat purchase vs. Tax-Free IUL $17,509 a year in tax-free retirement income, You would need $583,000 in a 401(k) or an annuity to generate the same after tax income. Would you choose the boat or the more secure retirement?

Examining  a Tax-Free IUL vs. boat purchase

A client asked for my opinion on his borrowing $75,000 to purchase a boat.

Life is full of trade offs.  What would you do?  Enjoy the boat or go for an extra $17,509 a year in tax-free income for life?   You would need $583,000 in an annuity or 401(k) to generate the same $17,509 in after-tax income.

New boat vs. a more secure retirement?

You might have been able to do both.  If you started a tax-free pension alternative several years ago, you might be able to borrow tax-free the $75,000 from your tax-free retirement plan, and pay yourself the interest, rather than the  bank or finance company.

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