Beyond 410k, IRA's?

Unless you have a need for life insurance (you need to leave someone lots of money when you die), almost anything is better.

Buy "Investing for Dummies". Consider buying tax efficient, low cost mutual funds such as Vanguard's S&P 500 index fund, SPINX in a taxable account.

-- Doug

Other than paying off your house (long real estate), you don't talk about asset classes at all.

Maxing out a 401k and IRA are account types, not asset classes - what did you buy in those accounts? Do you have cash set aside for an emergency fund (and where?)

That depends. For what *purpose* would you be buying life insurance? Are you simply looking for an investing vehicle through which to get, say, equity market exposure? If so, life insurance is very likely *not* what you want. Are you looking, say, for your beneficiaries to get a wad of cash if you die? Then it probably is what you want.

A bit more in specifics would be helpful, but going on what you've written above, I can guess that odds are that you should simply open up a regular, old fashioned taxable brokerage or mutual fund account.

You can put money in banks, bonds, buy stocks, buy a rental apartment to rent, etc, there are many choices. These insurance products typically are overpriced relative to what you can get elsewhere.

Another choice is to work less.

I have no need for life insurance, i.e no wife or kids. But this agent was talking all about the fact that your investment grows tax-free and can outperform mutual funds. Is this just plain deceit?

Thanks, I have just ordered this book used from Amazon.

Yes but only if you shop for products with rock bottom expenses. Otherwise, the amount of money you save from the taxes all go to the inusrance company.

If you are looking for tax-deferred growth, variable annuity from Vanguard at 0.30% extra ER would be appopriate for bonds and reits. The argument for VAs to hold domestic stock is less compelling. The problem is that a VA would convert capital gains and qualified dividends to income taxable gains so the tax-deferral edge is so slight, it's not worth the 59 1/2 lock in. (10% IRS penalty for withdrawal before this age.)

Variable Universal Life is approprite for a very small subset of investors. The problem is you don't need life insurance so that's money thrown away. *IF* you needed life insurance and if you had another 30K/yr beyond your current investments and if you were in good health to get good life insurance premiums and if and if and if and if ... then maybe a low-cost, no commission VUL from TIAA-CREF might suite your purpose.

Doubtful anything the agent is selling could beat the above two options.

No, it's more salesman's half truths than deceit. The money does grow tax deferred (not tax free). You end up paying taxes when you withdraw it, although I understand there are some ways of withdrawing that reduce those taxes.

However, a tax efficient mutual fund can limit your current tax burden and let you pay capital gains taxes at 15% or less when you withdrawn. Anyway, paying taxes is not all that bad a thing. It means you are making money. A favorite line in this group is "Don't let the tax tail wag the investment dog."

Finally, money in taxable accounts is *your* money. You can do anything you want with it without rules, age limits, or other nonsense. Go to Europe, buy a house, go back to school, anything.

Insurance can out perform mutual funds, there are some truly awful funds out there. But insurance as an investment tends to have fairly high costs associated with it. (Who is paying your friend's salary?) High costs are a drag on performance that it is difficult or impossible to overcome.

-- Doug

Do you never expect to marry or have kids? You may delay life insurance until it's too late. One serious illness can disqualify you except for the most expensive policy. It's likely that with certain illness you will find no one to insure you. A life insurance policy shouldn't cost you much now. Thumper

Not being a big sports fan, I have the bumper stick "don't let the tax tail wag the investment dog" (as another poster just quoted). Next to it is one that reads "Friends don't sell friends variable annuities."

Whole life or any life insurance as investment falls into that category for me. I think insurance is great. I have two term policies purchased by a trust on my life on my wife's. We have insurance on each of our cars, and on our house. Not having any of these five policies would be irresponsible, I think.

To use this product and tie up your money with one company and lose most flexibility makes little sense to me.

If next November things change enough, and there are no long term 15% cap gains or 15% dividends, and you are in the 33% bracket, I might have another opinion. If the extra fees in the insurance wrapper are 1% total per year, well, you've blown the whole savings even if no tax at all was due at withdraw. You know that ain't happening. Paying small taxes on the cap gain distributions and dividends is minimal. S&P yield is approx 1.7%. $1700 on $100,000. $255 tax. Not enough to push you into a bad decision.

JOE

Senior life Settlements.

Best thing going now.

Gary

OK, nobody else bit on this, so I will. Why would an investment in Senior Life Settlements be better than a low-cost, tax-efficient, index fund?

-Will

One unspoken angle is protection in a lawsuit or bankruptcy. Generally 104/403/IRA are protected from seizure. Its unclear if annuities are also (may vary by state). General savings accounts are not protected.

(remember OJ)