There are many untrue or harmful ideas and traditions that have become part of everyday financial advice. One of the most potentially harmful of these is the qualified retirement plan.
The reason why 401k’s, IRA’s, etc. can be so harmful is the type of vehicle these funds are positioned in.
American’s choose a 401k to save their money, but the problem is that their money is not safe in a 401k to save money in.
Why is this? Because a 401k is an investment vehicle.
What is the difference between a savings vehicle and an investment vehicle? Let’s look briefly.
An investment vehicle can grow rapidly, but it can also lose money quickly, because they are tied to current market prices. They have no guarantees. They also have fund managers who monitor your investments, so you have to pay a yearly fee for this (many that you may not even know you are paying). Because they are pre tax dollars, you run the risk of paying higher taxes at a later date.
Along these same lines, in a 401k you have no control over where your money is invested. At the same time, you don’t have the ability to use your money for the things you need right now, and if you draw the money out early, you will incur massive penalties.
On the other hand, a savings vehicle is a safe place where you cannot lose money.
So what are our alternatives investments to a 401k, IRA, or other qualified plans?
Well, when we take a look at all the savings vehicles around, it may surprise you that the most effective savings alternative for your dollar is found in a Permanent Whole Life Insurance Policy.
Whole Life Insurance?
When structured properly by a professional, a cash value life insurance policy takes on many attributes you cannot find anywhere else.
Tax free growth with post tax dollars, if treated properly you will never pay taxes on this money ever again.
Liquidity, meaning you can use the money anytime you need.
Guarantees – the right life insurance policies will never lose money, and will have a guaranteed yearly floor, or a positive guaranteed return every year no matter what.
And many others.
Why is this? Because life insurance companies are some of the oldest and most profitable companies around. They are some of the most stable institutions economically.
Sign up, and watch our video series in the Infinite Banking Tool Kit, and find out if a 401k alternative is right retirement savings vehicle for you.