Refinance Case January 2015
Example: $325,000 Home No Mortgage Property Taxes $1,035.00 & Home Owner’s Insurance Coverage/ Umbrella $309.00 monthly. Previous accelerated mortgage payment $2,100.00
Refinance: New mortgage $240,000 maintains 26.12% equity (no pmi)
25 year loan, 4% fixed interest rate, monthly payments $1,266.81
The rate of Return on Equity: Where to put your Money. Personal Pension Plan The 1099 Never Strategy EIUL*
Client Age 52 Summary of Proposed Illustration at 7.5%* rate of return
Plans to retire at age 67, needs supplemental retirement income, security to payoff mortgage in the event of death, the ability to payoff the mortgage at retirement.
Set Up Equity Indexed Universal Life Policy (EIUL)* Parameters maximize the growth of the equity, along with income on a tax free basis, maintain flexibility & liquidity. Designed to maximize fund policy over a 6 year period at $40,000 a year to the IRS/MEC limits.
Immediate Death Benefit $725,611.
Tax Free Income Available at age 67, $45,080.00* at age 85
Total Paid into policy $240,000 with $856,536* withdrawn. Balance at age 86, $173,941*
Rate of Return 7.5% effective interest rate 2.60%, which provides a 4.9% Tax Free Return on Equity*
Let Uncle Sam & the IRS be of Help.
By eliminating interest expense through the traditional method of making extra principal payments on your mortgage, you are eliminating one of the largest tax deductions still available. This partner is Uncle Sam, who can truly help you accumulate a larger degree of wealth and financial security.
*These are non-guaranteed figures; they will be higher or lower. The 25-year historical index crediting for this period has been 8.6%, which is the lowest over the past 30 years. Illustrations and Summaries included.
* Tax Free Distribution or Income are based on the use of partial surrenders and zero or low cost loans and policy structured within the MEC guidelines with the policy remaining in force! Kelm Financial Services Inc. does not provide legal advice nor tax calculations, preparation or advice. Consult with a licensed professional in that field for additional information.
Chris T. Kelm, CFP®
Senior Financial Advisor