72 • MARTIN H. RUBY
Let’s explore that question.
Gaining Flexibility Here’s an ugly truth: In your 401(k) or IRA, the IRS is calling all the shots. The IRS has decided you can retire at age fifty-nine-and-one- half. But sometimes you need to access your retirement funds be- fore that date. What if you want to use some of these funds to send your child to college, or cover a medical emergency? Well, in a 401(k) or IRA, you pay a hefty price. Not only do you pay taxes on the money you withdraw, you pay an extra 10-per- cent tax penalty. If your taxes are around 25 percent, that means you’ll give 35 percent of your money to the IRS if you need your funds early. Now let’s look at the flip side. The IRS wants to collect the taxes on the funds in your 401(k) or IRA. So the government requires you to take money out of your fund at the designated age. What if you’re still working and don’t need the income? Too bad. You have to take it (and pay taxes on it) anyway. With IUL, it’s different. Properly structured, you can access funds anytime you want. Need to use a little of your savings to send your kids to college? Fine. Want to put that money back into your account few years later? Great. Are you seventy-t hree and still using other assets for retirement? Fine, leave the money in your IUL policy until you need it. No big deal. A Self-Completing Plan Flexibility isn’t the only benefit of choosing an IUL structure to save for retirement. These plans are also self-completing, and that
was an important consideration for my daughter. Here’s the great thing about IUL: it’s life insurance. And life insurance comes with a death benefit.
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