Matt Smith, CFA®, CFP®

Financial Planning for When Life Goes Live. Designed for BigLaw Attorneys. BigLaw Financial Planning Brief Here:

[MichaelKitces @MichaelKitces]

How Life Insurance Loans Really Work And Why It’s Problematic To “Bank On Yourself” https://t.co/IEeUXYXp0B

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@iuladvocate One day, somebody you care about will fall victim to this. Imagine what you could do if you put all this energy into something positive that can help people. There’s no reason you have to destroy people’s financial life like this

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@ShitFund

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

https://t.co/UR2iJu1xNE

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@Vince_R_Jansen @LouMannheim87 @Anon48478 @MebFaber I think it’s because even if your bond matures and you get your principal back, your “real” return (purchasing power) does not recover.

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@iuladvocate Compare the tax drag of a taxable brokerage account in the S&P500 to the drag of IUL fees and capped returns on a S&P500 linked IUL product. See what kind of ridiculous capital gain assumptions you have to make for your toxic product to make sense

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@mbontrager5 What these people do to mom and pops who don’t know any better, and give them their trust, is unconscionable

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@mbontrager5 @withoutwallst It’s cool tho cause victims will generate $50k/month in passive income. No worries, all good.

[Marvin Bontrager, Ph.D. @mbontrager5]

The agent was probably an infinite banking specialist

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@mbontrager5 I cannot fathom how regulators allow these people to talk victims out of contributing to their 401k and instead put it in whole life. What do they say when the 1 or 2 ppl who kept the policy for 20 years hit retirement and are financially devastated?

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

You should think of it like a tree that is consistently pruned, and as you pick up the limbs that have been pruned off the tree, you think to yourself, “wow, I have more timber than I did yesterday” because you don’t realize you have less tree today as a result of cutting the limbs

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@PeggyRuhlin @ForemanTaxLaw Yall, CFP’s are “required” to act as fiduciaries by the CFP Board. It’s not law. Legal fiduciary duty is required of Investment Advisors, who may or may not have the CFP marks. Two very different things.

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@DilksJay I’m just looking at the first example, on the S&P, but I’m seeing a 20% differential in cumulative returns. It doesn’t seem like a big deal when starting with $10k, but as a retiree, does the actual $ difference on your actual investment not bother you? 20% cumulative is a lot

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@rgrikard Literal video of the allegory of the Mexican fisherman

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@OliverBCushing Another reason my attorney financial planning clients should take estate planning seriously. Although federal student loans are generally forgiven upon death of the borrower, those who have refinanced into private loans may not have the same outcome.

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@OptimizedPort And also that taking dividends as income can destroy your wealth over time if you are taking them from a fund that underperforms in total return. Taking 3%+ of the fund’s value every year is dangerous if the fund isn’t growing significantly.

[Matt Smith, CFA®, CFP® @ConcertFinPlan]

@SCHDaccumulator If an asset manager is paying you to post such misleading stuff, they should be severely sanctioned. If not, you should face some sort of consequence for anybody who thinks what you’re saying makes sense and is a good idea

[Robert Rikard @rgrikard]

A retired teacher took tax-free income from her life insurance policy just like her advisor and the carrier designed it.

She was told by a “wealth advisor” this was better than a 401(k). She’d be “fully paid up” after 4 years.

She transferred her 401(k), took out the policy loans exactly as designed, and then the policy collapsed.

And the IRS sent her a bill — taxes at ordinary income rates on money she’d already spent. Money that was gone.

I’m a lawyer who has spent the last decade suing over these policies. They’re called IULs — indexed universal life. And they get sold to people as tax-free retirement plans.

Here’s the part nobody explains at the free steak dinner.

That “tax-free income” isn’t your money. It’s a loan. Against your own policy. And it only stays tax-free as long as the policy stays alive. These policies are NEVER “fully paid up.”

The fees, the loan interest, the underperformance — they drain the policy from the inside. When it runs dry, it lapses.

And the day it lapses, every dollar you ever borrowed becomes taxable income. All at once.

Her retirement, gone. Because she did exactly what she was told.

This is a story happening every day across this country and consumers need to be warned.

[Robert Rikard @rgrikard]

Another real world IUL story.
Nick Fortune had a YouTube channel.

He called it Rich and the Bull.

The premise: the ultra-wealthy had kept certain financial secrets to themselves for 40 or 50 years. Fortune and his co-host were going to share those secrets with average people.

For free. On YouTube.

They called it an IGIC. Investment Grade Insurance Contract. It was magical. Better than a 401(k).

Fortune introduced himself as an attorney and sophisticated retirement planner.

Every credential was fabricated.

His co-host was a licensed insurance agent appointed by one of the largest insurance companies in the country.

The secret they were sharing? An IUL. A complex and expensive life insurance product.

The massive commission they were about to make wasn’t in the videos at all.

When it was over, they convinced my client to deploy his entire 401k retirement savings into an IUL.

It has cost him millions.

These are the stories I’m going to start telling here.

[Robert Rikard @rgrikard]

Last year Americans put $3.8 billion into a product sold as tax-free retirement income. Indexed Universal Life or IUL.

The industry’s own analysts say the average real return was 3.23%.

Agents illustrated 6, 7, sometimes 8 or higher.

Most of those people haven’t started taking income yet.

When they do, the IUL doesn’t just underperform.

It starts to die and retirees get crushed financially.

I’ve litigated hundreds of these cases over the last 9 years. This is the retirement crisis nobody is talking about.
I’ll start talking about it and sharing what I’m seeing in the sales channels, the IMOs, and critically, the real world performance.