Let’s take a deeper look why IUL’s are replacing 401k’s.

Safety: With an IUL, ZERO is your HERO. Being Index’d on the market you will have a floor of Zero and the luxury of the gains when the market goes up. 401k’s can take BRUTAL beatings and lose funds right before retirement.

Liquidity: With an IUL, you’ll be liquid within days. There are no penalties for accessing funds before age 59 1/2. (401k’s fined a 10% penalty for withdrawals prior to age 59 1/2 plus ordinary tax.)

Distribution: With an IUL, you can access the funds TAX FREE (via a personal loan) or let the principal continue to grow at anytime. With a 401k there are Minimum Required Distribution requirements at age 72.

Predictability: With an IUL, you will index to the S&P500 or Us Pacesetters. The carrier that I prefer has various ways to index with return’s averaging from from 8%-14% over the last 20 years.

Contribution: 401K, there are limits on contributions and company match. With an IUL there is more flexibility with how much you can fund.

Tax Favored: 401k’s are grow tax deferred now but you will pay higher taxes later when you liquidate. IUL’s are post-tax money that grow tax-free, distributes tax-free (via Loan) and transfers tax-free at death.

Living Benefits: Your IUL will give you Critical, Chronic and Terminal Illness benefits on day 1. You’ll be able to access the policy death benefit while living. 401k’s do not offer this option.

Death Benefits: On day 1 you will have a death benefit established. Talk about peace of mind knowing there is a plan in-place for your loved ones. With an IUL, your death benefit passes-on Tax-free unlike a 401k which is taxed. 401k’s do not offer this option.

Fee’s: An IUL is an insurance policy that offers living & death benefits once the first premium is paid. There is an annual fee to keep your insurance policy in-force. Your accumulated cash value could off-set this fee as your cash value grows. There are management fees with 401k’s of usually .05-2% for financial advisors to manage and invest your funds.