401k Maxed Out? Consider Adding an IUL Fund to Your Retirement Portfolio

  • Although the most popular method, 401k(s) aren’t the only tax-sensible way to invest in your future.
  • Index Universal Life (IUL) funds are an increasingly attractive option, as they are tax-free during growth – and when you cash out, too.
  • For many investors – including young investors – IUL funds could represent a highly risk-mitigated and effective investment vehicle.

Most investors are well-acquainted with 401k(s), which are considered the “gold standard” of retirement saving due to employer contribution matching. But 401k(s) are not without their faults. They are subject to market volatility, annual contributions are limited and they are subject to steep taxes when it comes time to withdraw. For these reasons, young investors may increasingly find value in a unique and attractive investment vehicle with less “name brand” recognition: An Index Universal Life (IUL) fund. To perform optimally, IUL funds require meticulous policy-building and calibration, as well as early and sustained participation. However, the corresponding benefits – and potential rewards – are worth considering:

  • Risk-Mitigated Growth: IUL funds increase in value when the market performs without losing value when the market struggles, mitigating your long-term risk considerably.
  • Unlimited Contributions: IUL funds have no contribution limit, allowing you to save more and pour more oil into the engine of compounding returns.
  • Tax-Free Growth + Withdrawal: Capital invested in an IUL is taxed up front, meaning you only pay taxes on the proverbial “seed” instead of the entire harvest.
  • No Withdrawal Age: You can withdraw money from an IUL at any point in time; there are no fees levied against you for withdrawing before retirement age.
  • Death Benefits: IULs generally include life insurance policies that allow your beneficiaries to access earnings tax-free in the event of your death.

Traditionally, IUL funds were associated with higher fees (compared to mutual funds), but new options and cost structures allow savvy investors to take advantage of the potential benefits of IUL funds with fewer overall expenses. Ultimately, the best way to take advantage of today’s IUL funds is to work with an experienced financial professional who knows how to set up a fund designed to pursue your financial goals while minimizing risk to the highest degree possible.

Find out if an IUL fund makes sense for you and your goals. Reach out to Cypress Private Wealth to schedule a discovery consultation today.


This article contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any tax advice. For information about specific insurance needs or situations, contact your insurance agent. There is no guarantee that an investment strategy will yield positive outcomes. Investing involves risk, including loss principal. Hector Garza is a Registered Representatives with, and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice is offered through Strategic Wealth Advisors Group, LLC, a registered investment advisor. Strategic Wealth Advisors Group, LLC and Cypress Private Wealth are separate entities from LPL Financial.


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