No. of Recommendations: 0
Hi intrcst,

If an investor captured all those fees and charges for their own account by eliminating the insurance company, and let it compound for a lifetime, there'd be enough to fund the retirement for a whole other person.
Not in a taxable spend-down environment they couldn't, but if they could structure the same FRI strategy in a Roth, and get sufficiently better hedge yields than the major institutions to beat the loan arbitrage, then they may be able to outperform the pros... sure.

The major advantage the insurance companies offer is new money can earn the old portfolio yields in their general account for the hedge safe leg. New money on a DIY basis gets 1/5 or less of that (1% versus 5-6%.)

You can stuff your dodged fees in a buy & hold strategy forever though, and come nowhere near the hedged FRI strategy.

Dave Donhoff
Leverage Planner
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.