than ($242,000), with a reduced contribution phased out entirely at ($252,000). How does the PFB utilize a well-designed, high-grade, dividend-paying w hole life insurance policy compared to a ROTH IRA? (The following illustrations are using past tax brackets, but they still show you the results at that time.) Scenario #1 This is an example of two twin sisters, aged 40, trying to decide whether to deposit $6,000 annually into a Roth IRA or PB. Their tax bracket of (22%) does not matter as they are using after-tax dollars in both scenarios. They are assuming a 4% rate of return on both money in both scenarios, and they are informed that neither of the scenarios is guaranteed. PB includes a waiver of premium in case of a disability for 26 years. Year Sister #1 IRA 4% ROR Death Benefit Sister #2 PB Acct. Death Benefit / Waiver of Prem.
Year 1
$6,240 $74,918 $185,815 $193,247
None None None None
$5,275 $52,195 $177,332 $278,714
Year 10 Year 20 Year 26
$264,100 $442,525 $564,017
Sister #1 goes ahead and puts her money in a 4% account, while sister #2 puts her money in PB with life insurance. After 26 years, they are both retired. Sister #1 has $193,247 in her ROTH account. Sister #2 has $278,214 in her cash value account with a net death benefit of $285,803. Should Sister #2 die at this time, her family would receive both cash value and net death benefit with a value of $564,017. Sister #2 has had life insurance for the entire 26 years with the waiver of premium should she become disabled. How does sister #2's financial strategy compare to yours?
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