Susan, age 40, is a civil engineer
Her firm has no 401(k) plan or other qualified plan
Highly compensated so:
No, tax-deductible IRA or a Roth IRA
Yes, non-deductible IRA
Yes, mutual funds
Using only nondeductible IRA and Mutual Funds
IRA at 65 > $296,813
Mutual Funds at 65 >$1,525,633
Annual cash flow after taxes $150,913
Using nondeductible IRA Mutual Funds and Life Insurance
IRA at 65 > $296,813
Mutual Fundsa at 65 > $762,816
Insurance cash at 65 > $958,530
Annual cash flow after taxes $514,713
Here are the results for Susan
| Taxes | Net Cash Flow | |
|---|---|---|
| Nondeductible IRA and Taxable ONLY | $10,419 | $116,822 |
| Nondeductible IRA, Taxable and Life Insurance | $6,144 | $150,913 |
Death Benefit → $122,919*
Added Cash Flow → $34,091
An example is hypothetical and for illustrative purposes.
*Death benefit will decrease over time (e.g. approx. $73,000 at Age 95; $10,000 at Age 100) but invoking the Overloan Protection riders will guarantee the policies will not lapse
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