Deciding between WealthX IUL Policy and a 401(k) for your retirement?

Let’s explore three ways a well-structured, maximum-funded WealthX (Indexed Universal Life insurance policy) can outshine a 401(k).

WealthX vs. 401(k): Strategic Tax Contributions

When comparing WealthX with 401(k)s, the first consideration is the impact of taxes on your contributions. Unlike 401(k)s, which deal exclusively with pre-tax money, WealthX allows you to contribute after-tax dollars. By addressing taxes upfront in your current tax bracket, you enjoy peace of mind, knowing that your WealthX policy can grow tax-free. When you access funds during retirement, you don’t have to be concerned about loss of tax deductions or fluctuating tax rates; since you’ve already paid your taxes. It’s about paying taxes on the seed rather than the harvest.

WealthX vs. 401(k): Shielding Against Market Risks

Let’s delve into how market volatility affects WealthX versus 401(k)s. Reflecting on the Lost Decade (2000-2010), where the market experienced turbulence, WealthX policyholders were shielded from losses due to a 0% floor, while many 401(k) holders saw a 40% decline. In the 2008 market crash, WealthX policyholders not only avoided losses but often tripled their money. Thanks to indexing, WealthX allows your money to be linked to the market without being directly in it, providing tax-free growth during market highs and protection during downturns.

WealthX vs. 401(k): Flexible Access to Your Funds

Consider penalties when comparing WealthX with 401(k)s. Imagine a scenario in your 50s, facing an unexpected emergency. If your savings are in a 401(k), accessing funds not only incurs taxes but also a 10% early withdrawal penalty. In contrast, WealthX offers a smarter solution. By accessing funds through a loan, you enjoy tax-free income at any age, for any reason, without penalties. Your nest egg remains yours, without becoming Uncle Sam’s breakfast.

Why 401(k)s Fall Short

Articles like Time Magazine’s “Why It’s Time to Retire the 401(k)” and The Wall Street Journal’s “The Champions of the 401(k) Lament the Revolution They Started” shed light on the pitfalls of 401(k)s. Originally meant as a supplemental plan, 401(k)s became the primary plan for many Americans. The unpredictability of market returns and limited control over contributions contribute to the dissatisfaction. DALBAR reports an average return of 3.49% for those with market investments in IRAs and 401(k)s, contrasting with the consistent returns WealthX provides, ranging from 5% to 10%.

Choosing the Superior Option: WealthX

In summary, WealthX, particularly the properly structured WealthX designed by The Policy Shop, outperforms traditional 401(k)s for several reasons:

Tax Efficiency: Eliminate concerns about future higher taxes by paying them upfront, ensuring tax-free income during retirement.

Market Protection: Enjoy market upsides without the downsides, thanks to indexing and the guaranteed 0% floor.

Higher Contributions: WealthX allows larger contributions compared to the annual limits of 401(k)s.

Flexible Access: Access funds at any age, at any time, tax-free, and without penalties.

Estate Planning: Transfer your policy’s money to heirs’ income-tax-free via the death benefit.

To explore how a properly structured, maximum funded WealthX can transform your financial future, contact our experts today. Your financial well-being is our priority.