I am grateful for your efforts, and I realize that every request that I make means significant work for you). That's how I learn things. On another site several years ago there was a similar debate about "Money Merge" plans to pay off your mortgage in 7-10 years. Full of moving parts and money flying about between accounts. It wasn't until somebody sat down and made a spreadsheet that it became clear what was going on, and that the way it "worked" was by double-counting money. Ever since then, I try to build a spreadsheet to help me understand a strategy.This spreadsheet started out simple and has gotten quite complicated. But it's been fun developing it.Once you'd got the basics down, especially if you made things a pluggable parameters, it's not too hard to add another tweak.Yes E/R = expense ratio.Same parameters as my last post:The S&P SMA strategy, $10,000 initial + $100/mo, 1975 to 2013.Total deposit (basis): $55,600. IUL with 0.70% fee --> final value $302,000B&H of S&P5000.10 E/R, no taxes. ---> final value $1,112,1000.10 E/R, 20% div tax ---> final value $1,094,100The amount of dividend available to reinvest is only 80% of the divident received, so you lose the benefit of compounding.The LTCG is $1,038,50020% tax on that is $207,700.So After-tax amount: $904,420Of course, if it was all in an IRA, no tax on div, so the final value is $1,112,100.Then you pay ordinary tax rate on withdrawal. Except if it's in a Roth.Assuming you spread it out over 3 years, call it 33%.So After-tax value: $734,000.=====================================Re-run with Accumulation ($10K initial + $100/mo) until 1/1/2003, then withdraw$1500/mo until 1/1/2013. Increase draw by 2.5% each year.20% tax on dividends, capgains tax on withdrawals paid out of pocket.Total withdrawn: $201,700IUL with 0.70% fee --> final value $29,800 B&H, 0.10 E/R, 20% div tax ---> final value $809,848After LTCG tax this is a bit over $650,000Yeah, you can structure the IUL so you pay essentially no taxes. BFD.I'd rather pay $150K - $200K in taxes and have $650K after taxes than pay $0 tax and have $30K.But sure as shoot, the guy with the IUL will crow about paying no taxes. ;-)I'm looking forward to see what Dave comes up with. Who knows -- maybe I made some stupid mistake and all this is garbage.
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