It seems kind of wild when you first hear it. A kid, even as young as just 17 days old, ending up with something like $150,000 to $200,000 a year in retirement money that does not get taxed. How does that even happen??
The basic idea comes down to starting super early and letting things grow without taxes, plus setting it up right (this is CRUCIAL). I think most parents are all about saving for college. They do not really stop to think about their kids having a retirement plan. And that is where you can get ahead.
Starting a retirement thing for a child makes sense because time does most of the work. You do not need crazy high returns or anything. With a properly-structures indexed universal life policy for a child, it can build up cash value without taxes holding it back. Then in retirement you can pull money out tax free. It also locks in the insurance for life no matter what happens health-wise later. Over time that cash can get really big… and on top of it all, it gives permanent life insurance protection too.
When the child is young, the insurance part costs almost nothing. That low cost mixed with all that time to grow turns into something incredibly strong.
Let me try to break down the numbers a bit… Say you start when the child is one year old, like I did for our oldest daughter. By putting in only $100/mo and letting it ride until age 60, she’ll be able to take out $150,000/yr completely tax free and still have a death benefit of almost $1,000,000 in her 90’s. Too good to be true? I can show you the details if you want.
The sooner you begin, the less money you actually have to put in overall. Waiting even three years can mean you need way more total contributions to hit the same spot. Time really is that key part people overlook sometimes.
Hit the “Contact” page to request a free strategic assessment to see how this works for your family!