How to fund your own worryfree, 100% taxfree retirement. Feb 27, 2016 a 702 j plan is not actually a retirement plan at all. Well, a 702j or 7702 isnt a retirement account at all. Get the entire 10part series on our indepth study on activist investing in pdf. A 702j is not actually a retirement savings plan at all. J retirement plan pdf plans dividend paying whole life 702j. A quick check of the irs website reveals nothing on 702j, whereas searching for roth or 401k brings up more than a few valid results. J retirement plan f financial literacy and planning in the united states 702j income plans. But the idea of using it to supplement retirement income isnt. These plans may be set up by employers, insurance companies, trade unions, the government, or other institutions. Managing retirement income starts with knowing what your sources of income will besocial security an employersponsored retirement savings accountand the rules that govern each income source. There are a lot of options to choose from when it comes to planning for retirement, including 401k plans, individual retirement accounts iras and annuities. And, in fact, a 702 retirement plan it also may be called a 7702 or 702 j plan is a life insurance policy.
Heres why the 702j isnt all its cracked up to be 702j plans stink. J retirement plan pdf plans 702j income dividend paying whole. Universal life insurance the rich mans roth tax free retirement. To prospectus dated october 10, 2006, prospectus supplement dated november, 2006, underlying supplement 17 dated august 11, 2008. A 702j plan is not actually a retirement plan at all. Review retirement plans, including 401k plans, the savings incentive match plans for employees simple ira plans and simple employee pension plans sep. Dec 19, 2015 i have just heard about reagans 702 j retirement plan. But a 702j plan is not a retirement savings plan like a 401k plan.
In chapter 6, they discuss how a knowledgeable agent will add a paidup additions rider to your policy to increase the growth of your cash value, while cutting the advisors fees by up to 70%. The 702j retirement plan demystified top benefits you should. Named after a section of the irs code, its designed to sound like a retirement plan, but it should not replace contributions to an ira or 401k. Individual retirement arrangements iras retirement plans for selfemployed people. Retirement plans are classified as either defined benefit plans or defined contribution plans, depending on how benefits are determined in a defined benefit or pension plan, benefits are calculated using a fixed formula that typically factors in final pay and service with an employer, and payments are made from a trust fund specifically dedicated to the plan. Have you heard about the secret retirement plan called a 702j that the government supposedly doesnt want you to know about. Mar 28, 2018 first, a 702j plan is not a retirement plan at all its a life insurance contract. Everything you need to know about saving for retirement. What is a 702j retirement planeverything you need to know. Affordable life insurance retirement secrets of the rich. I think 702j li is a flim flam scam for individuals who set up their own church under irc 501c3 and become a minister of the church or an employee which allows the church to own the policy. The 702j retirement plan demystified top benefits you should know updated march 1, 2018.
Is reagans secret 702j retirement income plan a scam. Ed and ruthann wolfe just wanted a safe place for their retirement savings. In recent months, insurance salesmen have been marketing 702j plans as a new kind of retirement plan. Regardless of how you approach retirement planning, there is one common thread. Your full guide to 702j retirement plans phils stock. The following is a summary plan description for the ameren retirement plan applicable to employees who are represented by a collective bargaining agreement with ameren illinois company formerly amerencips and ibew local unions 702e illini, 702s shawnee, or 702w great rivers and were hired prior to october 15, 2012.
What is a 702j retirement plan, and should you get one. Its a life insurance contract governed by section 7702 of. Arielle oshea is a staff writer at nerdwallet, a personal. Congress has expressed a desire to encourage responsible retirement planning by granting favorable tax treatment to a wide variety of plans. You may have heard or seen the pitch for president reagans secret 702j retirement plan or something called the 770. The motley fools retirement expert gives his opinion of 7702 retirement plans, and how they compare to a more traditional ira. The benefits tend to favor high net worth individuals who are attempting to lower their tax liability. Where the rich are safely putting their money for a tax. There are no getrichquick ways to fund your retirement, other than hard work, careful planning, and early and consistent saving. There are a few benefits and drawbacks of the 401k.
Seen together, its obvious these two terms were taken from the 7702 plan discussed above. In the event of any inconsistency between the retirement plan. While saving in any way is great, each of these offer different benefits and drawbacks. More than 3,500 banks are invested in the 702j retirement plan, but you never hear them talk about this to their customers.
What are the best types of 702 j retirement plans for retirement and learn how you can avoid the most common mistakes that individuals have made when looking to purchase a. Naming a life insurance policy this way makes it sound like the 401k even though they are nothing alike. The best retirement plans can help you build your nest egg. President reagans secret 702j retirement plan what it is. You pay extra premiums each month which increases the.
But given the different features and benefits of the various types of iras and 401k plans, it can be a challenge to find the right one. Where the rich are safely putting their money for a taxfree. Read this title for free and explore over 1 million titles, thousands of audiobooks, and current magazines with kindle unlimited. The short answer is that the 770 account and the 702j account are both marketing ploys. In nongovernmental institutions, 457 plans are usually offered exclusively to highlycompensated or management employees, says gary s. Jul 19, 2019 retirement plans j plan pdf scam youtube 702j. J retirement plan pdf plans dividend paying whole life.
This is a retirement plan that allows you to direct a portion of your paycheck into an investment account. This is fascinating, largely because there is no such thing as a 7702 plan. A growing number of insurance companies and independent financial advisors have been selling 7702 plans, sometimes referred to as a 7702 private plan, for retirement. If you have any questions regarding any recent update to the retirement plan, please refer to the benefits updates that modify the retirement plan or contact the aftra retirement fund at 800 5624690. Depending on who you talk to and your current situation, the answer could be affirmative or negative. A 702j retirement plan is a marketing term for a permanent life insurance policy governed by section 7702 of the u. Making contributions every month allows you to harness the power of time and use compound interest to really see your investment grow substantially. The 702j retirement plan demystified top benefits you. The benefits tend to favor high net worth individuals who are. Xxxx email answered by a verified social security expert. Selecting payout methods when you retire, you begin to take income from your defined benefit pension or defined contribution plan.
Learn more about dave on nerdwallets ask an advisor. First, a 702j plan is not a retirement plan at all its a life insurance contract. A 702j retirement plan is a retirement strategy that uses a life insurance contract to fund retirement. The truth about secret 770 accounts are they legit. And, in fact, a 702 retirement plan it also may be called a 7702 or 702j plan is a life insurance policy. Jan 01, 2008 ed and ruthann wolfe just wanted a safe place for their retirement savings. The 702 j retirement plan is not an investment and not technically a retirement plan.
That is section 7702, which has nothing to do with retirement plans at all. J retirement plan pdf plans the 702j tom dyson amazon com books. There are several reasons why using cash value life insurance to fund your retirement is not a good idea the following is a great article which highlights the issues around 702 retirement plans. Feb, 2017 what are the best types of 702 j retirement plans for retirement and learn how you can avoid the most common mistakes that individuals have made when looking to purchase a 702 j retirement plan. For those of you that are familiar with the internal revenue code irc, or happen to know a little about the tax advantages of life insurance contracts, you probably know that irc section 7702 defines. New living benefits now allows you to use your life insurance while you are still alive. A 702j plan is not a retirement savings plan like a 401k plan. One type of plan, though, should be approached with special caution. Types of retirement plans internal revenue service. Nov 20, 2019 the retirement plan that works best for you may not be identical to what suits someone else. The advantange of the 702j plan is that it does not have to conform to the rules for li policy cash values under 7702a or the premium guideline. A 702 plan is simply a cash value life insurance policy that is being marketed as a vehicle for retirement savings. May 09, 20 a growing number of insurance companies and independent financial advisors have been selling 7702 plans, sometimes referred to as a 7702 private plan, for retirement. Thats right, a 702j is not a retirement plan, even though that is how it is marketed.
President reagans secret 702j retirement plan what it. I have just heard about reagans 702 j retirement plan. Retirement plans j plan pdf 702j income achieving american prosperity by. The 702 j retirement plan hoax is used to create mystery and interest in a subscription based newsletter. The idea is that you save some money on taxes by making these pretax contributions while also choosing investments that will grow over time so you can retire with a nice sum of money. Your full guide to 702j retirement plans phils stock world. Jun 24, 2019 702j retirement plan, defined you may see these plans pitched with a few different names, notably president reagans secret 702j retirement plan or the bank on yourself method. Sep 18, 2015 there are no getrichquick ways to fund your retirement, other than hard work, careful planning, and early and consistent saving. You may have heard or seen the pitch for president reagans secret 702j retirement plan or.
Libertarian paternalism american economic association. For the first time, weve compiled 99 of the best retirement tips into one easytoread guide. What is a 702j retirement plan and how could it benefit. As a financial planner who specializes in income planning for preretirees and retirees, my professional experience. Looking for the perfect retirement plan can be a confusing maze to navigate. The name comes from section 7702 in the internal revenue code, which regulates life insurance contracts. Like many retirement plans, 702j draws its name from the section in the tax code it references.
The 702j lan is usually another term for a whole life or permanent life insurance policy, for which you build cash value by paying more than is. Read this book and over 1 million others with a kindle unlimited membership. By dave anthony, cfp in recent years, insurance salesmen have been marketing the 702j account a. A retirement plan is a financial arrangement designed to replace employment income upon retirement. Lesser, a retirement plan consultant and author of the. These are also sometimes referred to as life insurance retirement plans lirp or modified endowment contracts. The 702 j retirement plan tom dyson paperback january 1, 2015 by tom dyson author 4. While interacting with our clients, we glean many valuable insights on how they became successful and accumulated wealth, and what they are doing to maximize their lifestyles today. A pension may be a defined benefit plan, where a fixed sum is paid regularly to a person.
A pension may be a defined benefit plan, where a fixed sum is paid regularly to a person, or a defined contribution plan, under. What is a 702j retirement planeverything you need to. But the idea of using it to supplement retirement income isnt new. Its an insurance policy specifically a permanent life insurance policy as defined under section 7702 of the united states code. We assume that, during retirement, youll want to maintain the standard of living you had just before you retired, which means consuming the same amount adjusted for your new zip code. Mar 01, 2018 what is a 770 or 702j retirement plan. It can be difficult to predict exact expenses in retirement. How much you would like to spend during your retirement is the most important driver of your retirement plan, but it is often the hardest part to predict. The name, like the 401k, is lifted from section 7702 of the. Banks are heavily invested in the 702j retirement plan tom worked as an accountant for two of the worlds largest bankssalomon brothers and citibankin london. The 702 j retirement plan tom dyson paperback january 1, 2015. What is a 702j retirement plan and how could it benefit me.680 297 933 788 930 518 81 514 1048 592 1431 875 1212 1641 99 1292 618 1340 793 143 469 313 786 1596 639 763 458 836 636 1329 1024 1063 169 833 175 1338 1307