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And setting aside 53% reserves for the S&P isn't apples-to-apples, either.
Sure it is, if you are equalizinng for the risks of loss (which is the entire point. s you've repeatedly realized, a retirement plan that leaves a senior open to sudden loss is no retirement plan at all.)

The practical reality is that, dollar-for-dollar, over some long period of time for the S&P vs. a hypothetical IUL (they've been in existence for only about 20 years), the balance in the S&P account will be higher--depending, of course, where in the market cycle one pauses to compare.
In *THAT* regard, if you aren't going to standardize for risk, I can just as factually say that buying lottery ticket *WILL* outperform too!

Kinda pointless, no?

But the S&P has the risk of being slaughtered from time to time and the IUL doesn't.
Which is why we mathematically standardize.

That's the question for the retirement planner. Would you rather earn less and have it be guaranteed, or would you rather take the chance, through the market's notorious ups and downs, that you'll earn more and that "more" will be there at the precise time you need it.
False choice. The IUL outperforms over large numbers.

That is to say; If you have 100,000 people in IULs, and 100,000 people in a naked S&P 500 buy & hold... even if you ignore risks, the net aggregate result will be that more IUL owners are left with more money, than S&P holders.

Because the number of S&P holders who caught the 1 out of 6 Russian Roulette bullet of a 50% pricipal loss will cause a greater overall loss than the total of all the IUL holders.

So, (in my best Dirty Harry voice,) you have to ask yourself 'do you feel lucky?'... well, do ya, punk?


(PS. if you *DO* feel like you're certain YOU will be the lucky exception.. again, why not get free drinks with the gambling?)

Dave Donhoff
Leverage Planner
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