New Opportunity for Lazy Money

Hello everyone, this is a different type of video this week but I am really excited to bring an announcement that’s something that the team behind the scenes has been working on for a while,  designing an alternative for your cash or “Lazy” money.

 

This is your money markets, your CD accounts, and your savings because we know they are paying practically nothing right now!

 

As financial advisors, we’ve been listening to our clients and listening to the concerns of everyone out there and know that people are holding thousands in cash-type accounts right now.  Millions of dollars are sitting on the sidelines.

 

With the economic concerns, people want to make sure they have money available to them, and yet they’re being penalized by doing it. Really, they are losing money safely. 

 

You may earn enough to buy a candy bar if that’s about it.

 

And all of those accounts, CDs, savings, and money markets, you’re also being taxed on anything you do earn. That may seem irrelevant because you’re not making much,  but when you add in that and you add in the inflation woes, the truth is you’re really losing money safely.

 

So if you have a CD or a money market or savings account, or a brokerage account that is trying to be very conservative and you are making less than 3%  then this is for you. 

 

We have a new opportunity where you have safety principal protection, access to your money anytime you need it but also have meaningful growth potential while being able to defer taxes on that until you actually take that money out. 

 

Index Universal Life (IULs) For Accumulation

 

This new option is all in a properly structured Indexed Universal life insurance policy with United Life. This is not your typical Life Insurance, the focus is on cash accumulation. 

 

I know many of you might think you don’t need life insurance anymore and in the traditional sense, you don’t but as we go through this I am hoping to clear up any misconceptions about how life insurance can work.

 

With this plan, there’s protection from market losses and there are also different creditor protections.

 

There’s also liquidity. You have the ability to take out your money as you need.

 

There is potential for meaningful gains, up to 8% per year. Your interest is tied to the performance of an index, the S&P 500.

 

Right now the cap is 8%. Let’s say that we start this November 15th, we’re going to come back next year on November 15th, and if the S&P is up 12% then that means you make 8%. 

 

On the reverse side, let’s say we come back next year and the market is down. Then that means you made zero for the year. In this case, zero is your hero because you didn’t lose. And really, you’re not much different than what you would have been in CDs, money markets, or savings.

 

We never say you’re going to make 8% a year but you should average  4 to 6% per year. 

 

Lastly, you do have a death benefit. The difference between this and traditional life insurance is the death benefit is the bare minimum so you are not paying high costs or insurance.

 

 If you put in 100,000 you might have $150,000 death benefit give or take depending on your age. Remember, we are not using this for a big death benefit, but for accumulation. 

 

The death benefit can also be living benefits. That means you can use this death benefit for long-term care costs or assisted living costs are things of that nature. 

 

The death benefit also goes tax-free to your beneficiaries just like any other life insurance.

 

With a lot of life insurance policies, there are also surrender charges on the cash accumulation. There is a 100% waiver of surrender charges with this plan.

 

There are two liquidity actions with this. First, you can take 10% out of your accumulation value at any point. Or you can take 100% out no surrender penalties. 

 

Maybe you want $150,000 in there or $200,000, but you want to have some liquidity.  We have clients in that position that open multiple accounts in $25,000 or $50,000 increments so that way you can always take one of them so you have that liquidity at all times, no penalties but could still leave other accounts to keep working for you.

 

Let’s just take a look and see how it’s actually performed.  We’re going to compare it to a CD and a multi-year guaranteed annuity. Right now CD’s making 1.15% would be like a dream CD and everyone would want, .15% is probably more realistic! 

Picture of Financial Chart - Financial Advisor Platteville Wisconsin

 

Another thing to remember,  you’re not paying taxes on the growth of this plan until you take it out. 

 

A couple more things to consider…

 

You cannot access the gains until after 59 ½ , you can always access your principle, but you can’t access your gains, so keep that in mind if you’re younger than 59 ½, it may not be the best fit for you. 

 

The other thing is you cannot use IRA or other qualified money. This has to be saving money that’s not in your IRA or ROTH accounts.

 

As a financial advisor, we would never suggest you put all of the money that you have in the bank or other liquid accounts here. It’s important to have a safety net that’s accessible immediately.

 

This could be a fit if you have over  $35,000 in a cash type account making less than  3%. The minimum investment here is $25,000. 

 

The thing you want to do now is lock in today’s rates. Right now the cap is 8%, however, with the low-interest rates environment that we’re in, that could always change. But if you are already in the plan then you lock in those rates for this year.

 

This came out at the very end of the summer and it’s been a very popular vehicle so, with things like this,  we often see that after a couple of months they end up having to reduce the cap rates a little to accommodate all the new business.

 

Let’s see if you qualify and if this is a fit for you to put your lazy money to work! Give us a call today or schedule a time on our online calendar!

 

Financial advisor -We serve clients in Mineral Point WI, Dodgeville WI, Platteville WI, Lancaster WI, Fennimore WI, Boscobel WI, Richland Center WI, Muscoda WI, Spring Green WI, Mazomanie WI, Sauk City WI, Middleton WI, Madison WI, Fitchburg WI, Verona WI, Mount Horeb WI, Barneveld WI, New Glarus WI, Monroe WI, Bellville WI, Oregon WI, Stoughton WI, Darlington WI, Cuba City WI, Hazel Green WI, Belmont WI, Dubuque IA, Freeport IL

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