Great article by CNN Money about wether or not Life Insurance can be a good investment vehicle. This argument has gone on for years and there will never be a concensus on if it is or not. Do your homework and make sure you feel comfortable with your options.
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When an adviser pitches universal life
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Insurance is crucial for most families - but not as a retirement savings plan.
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NEW YORK (Money) — My husband and I are in our 30s and have retirement plans through our employers. We’ve been working with an insurance agent who wants my husband to forego funding his 401(k) plan, which doesn’t offer company matching funds, and instead invest for retirement through a universal life policy.
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| The idea is that once we reach age 60 we’ll begin making withdrawals from the policy’s cash value. Does this seem like a good way to plan for retirement? |
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First, if your husband follows the agent’s advice of doing the life insurance policy instead of the 401(k), you and your hubby are giving up a very nice tax break - namely, the money you contribute to the 401(k) isn’t taxed until you withdraw it. The life insurance policy offers no such upfront break. So on that basis alone, I’d say the 401(k) is the better deal.
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