End of Year Financial Tips

I read an article in the Los Angeles Times on Saturday.  You can see the article at this link.  In the article, Tom Petruno announces his retirement and provides his parting thoughts about the financial markets, including some tools, tips, and strategies for investors.  It’s an interesting article and I sent him a reply, which I’ve printed below –

Hi Tom,
I liked your article and the tips except for the fact that you omitted reference to the most misunderstood financial tool of all, which is more valuable today than it ever has been.  Indexed universal life insurance has outperformed the indexes since 2000, with no risk to the cash value and therefore, no down years.  Cash value can often be accessed when needed using zero-cost loans, without taxes and penalties.  If the user dies before retirement, their beneficiaries receive the face amount without income taxes.  If the user lives to a nice post-retirement age, they will enjoy disbursements from the cash value that provide an income free of income taxes that cannot be outlived, while still providing an estate for their heirs.  Don’t you think this would solve a lot of problems being faced by recent retirees and those planning to return in coming years?  Yes, you can argue that there are too many expenses in the early years and part of the premium goes to pay for the insurance each year but, if you do the math, you’ll find that indexed universal life insurance blows the doors off all of the “qualified” retirement plans for most people, even those that receive matching funds.
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