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URL:  http://boards.fool.com/rerun-of-daves-iul-scenario-30628463.aspx

Subject:  Rerun of Dave's IUL scenario Date:  4/9/2013  12:54 PM
Author:  Rayvt Number:  71868 of 79818

Now that the spreadsheet has gotten quite sophisticated, it is worthwhile to revisit Dave's original scenario.
This is a backtest of investing directly in the S&P500 vs. investing in the S&P500 index the way that an IUL (Indexed Universal Life) policy does.

IUL parameters (all annual):
Floor: 0%
Cap: 12%
Fees: 0.75%
Policy loan interest rate: 6.0%
S&P methods pay 15% tax on dividends. No other taxes considered.

Note:
Starting dates are beginning of that month.
Ending dates are end of that month.

Accumulate and grow for 28 years, then withdraw for 10 years.
--------------------------------------------
Initial $10,000 deposit. Adding $100/mo
Start Jan-1975
Begin withdrawals Jan-2003
Withdraw $1,500/mo,

Final values (strategy, Net final value, ending date):
B&H w/div	$844,962	Dec 2012
10mSMA $599,997 Dec 2012
IUL (loan) $41,003 Dec 2012
IUL (withdraw) $48,506 Dec 2012

TTL withdraw -$180,000

--------------------------------------------
This run begins withdrawals at about the peak of a boom, so it
has money being withdrawn while the portfolio is being crushed.
You are taking money out of an ever-dwindling portfolio.
Start Mar-1971
Begin withdrawals Mar-1999 (just before the peak before the dot-com boom)
ending Mar-2009 (at the bottom of the financial crash)

Final values (strategy, Net final value, ending date):
B&H w/div	$436,936	Feb 2009
10mSMA $624,4