Beal Financial Group - IUL vs 401(K) (2024)

Unlike with traditional 401(k)s, The IUL is funded with non-qualified money, or after-tax dollars. So what you pay into IUL has been taxed already. That’s good news for future income – tax-free retirement income! IUL also offers the advantage of a tax-efficient death benefit for loved ones.

Beal Financial Group - IUL vs 401(K) (1)

The index universal life policy is a worthy alternative to the 401(k), the IRA, the Roth IRA, and other investment strategies for your retirement fund.

What Are Some Other Key Differences?

  • Money within a 401(k) plan is exposed to losses from market downfalls
  • 401(k) plans don’t let you borrow against them with the same flexibility as you might with IUL, generally speaking
  • 401(k) withdrawals before age 59.5 are subject to a 10% penalty and income taxation
  • Unlike with the 401(k), distributions from an IUL policy, when taken as loans, are non-taxable
  • Withdrawals from a 401(k) are subject to more substantial tax liability
  • There are less restrictions on contributions to an IUL policy than they are to a 401(k) plan
  • In the 2020 tax year, the contribution limit for a 401(k) is set at $19,500. THAT’s ALL!
  • With its contractual guarantees, IUL offers the benefit of preserving your earning power in your professional working years
  • Indexed universal life insurance can also be customized for different situations: there are riders for chronic illness, work disability, and other specialized circ*mstances

And It Gets Even Better!

  • You can pour money into the IUL while other retirement options have restrictions on the amount of contributions you can make
  • You get life insurance that cannot be revoked
  • You cannot lose your principal to a recession
  • When you start withdrawing money in retirement it’s tax-free! The federal government cannot look at a steady $100,000 a year withdrawal from your IUL, combine it with your $32,000 Social Security income and declare that you are making too much money and tax your Social Security money

The IUL is going to prove to you it beats traditional retirement strategies every time. So don’t walk into the “retirement casino” that has been beating you year after year. Build your OWN casino. You play the games YOU want and get some gains without losses due to a bad market. Walk out with your wealth in tact.

Beal Financial Group - IUL vs 401(K) (2024)
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