For Noah, a successful architect and residential builder, “tax favored income” was beginning to feel unobtainable. With a rewarding, but challenging career and a firm that he built from the ground up, Noah watched his parent’s generation retire to both successful and unsuccessful results. Itching for time and resources to pursue his dream of building a LEED certified house on Whidbey Island — and understanding that his success only means so much without a plan for retirement — Noah’s personal CPA referred him to us for a consultation.
With a respectable income and two IRA’s that he opened in his early twenties, we sought a way to supplement Noah’s future retirement income while minimizing taxes on his existing assets. The solution for Noah was simple: invest the maximum premiums allowed into an Indexed Universal Life policy that would provide him with benefits during his lifetime that could be used as supplemental income during his retirement years.
Here’s how it works for Noah. With the downside protection of a Universal Life Insurance policy and the upside potential that Indexed Life Insurance provides, the Indexed Universal Life policy combines strong growth opportunities with protection, falling right in the middle of the risk versus reward scale — Noah’s personal comfort zone. Without participating in stock or equity markets, Noah’s Index policy will credit interest based only partly on an equity index and the interest earned will never be less than zero or greater than any CAPS imposed by the carrier.
By investing the maximum after-tax premiums allowed over a 5 year period and receiving the minimum death benefit required, Noah is able to use the funds during his golden years of retirement. While he isn’t the classic case of someone who would require a solid life insurance policy — a healthy single professional nearing the apex of his career — the policy offers Noah the peace of mind that if anything happens to him, there is a death benefit for his family to rely upon. So what now? He can simply sit back, plan his retirement, and design his dream house while his Index Universal Life Insurance policy does the work for him.
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“Experiences of clients with life insurance products will depend on their unique facts and circumstances and we cannot guarantee the same results for all clients.”