Originally Posted by
Myfingershurt
The best part of whole life is being able to add to it above and beyond the base premiums to increase cash value. Those funds are added after tax, grow tax free and can be withdrawn tax free. Lots of people is the cash value of their whole life policy to act as a buffer for years when the market is down and their other IRAs, 401(k)s etc are under performing. You can take the minimum from those accounts and supplement with the cash value acct to stretch your IRAs further. Another option is to convert you cash value at retirement into an annuity. The plan that this contract is supposed to deliver will be client directed, so you can invest the money anywhere you want and can use what ever risk index you’re comfortable with. There’s really a lot of options with a whole/universal life policy. Dave Ramsey is for people that live under mountains of debt and don’t know how to use debt for their own benefit. You’ll never hear him giving financial advice to people with six figure incomes and seven figure (or higher) retirement accounts.
Exactly wrt Ramsey. I was having a conversation with one of his followers who couldn’t believe a retiring captain had financed his home. This is when you could get mortgage a little over 2%. He was of the mindset that all debt was bad and that if you were doing anything different, you were leveraging. My point was it was almost free use of the money at 2% and even taking the most conservative path, you can probably make more in a CD. Well, I was wrong. You can have that money in a savings account at the moment and make better than a point differential. Rates go back down? You can always pay off the mortgage.
Don’t get me wrong, Dave has a lot to offer, but his simple advice starts losing traction as it goes up the income hill.