Yet another whole life insurance question

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Sirimboi
Posts: 2
Joined: Sat Feb 10, 2018 12:17 pm

Yet another whole life insurance question

Post by Sirimboi » Tue Mar 13, 2018 7:47 pm

I know that Whole life is a horrible investment but my employer is offering another tax sheltered option which I am now considering.
Of note, we are already maxing out 403b (with match), 457(no match), backdoor roth, 529s. Not eligible for HSA.
My job offers a Capital Accumulation Plan which underwrites a whole life insurance through John Hancock insurance funds. The kicker is that my employer is matching 50% of my contribution. 7 years vesting period (but I do plan to stay here for life – another 25 years). Based on income, I can contribute up to $40,000 a year, post tax. Money grows tax free.
I am torn between this and just funding a taxable account.
Any thoughts are appreciated.

JoeRetire
Posts: 1694
Joined: Tue Jan 16, 2018 2:44 pm

Re: Yet another whole life insurance question

Post by JoeRetire » Tue Mar 13, 2018 7:59 pm

If you need insurance, buy insurance.

If you need investments, invest.

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David Jay
Posts: 5791
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Yet another whole life insurance question

Post by David Jay » Tue Mar 13, 2018 8:23 pm

If you have done any searches here on BH you have probably seen some of my negative comments. However, it is hard to walk away from a 50% match. If I expected to leave within 10 years I would likely participate. My issue would be the low returns that I would have to accept for 25 years.

I would say: do a spreadsheet to see the impact of 25 years of compounding and see if the 50% match overcomes the lost gains.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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