FINANCIAL TERMINOLOGY

Qualified Plan: A financial product that is funded with pre-tax dollars.  Taxes are paid when the money is withdrawn later in life. 

401(k):  A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions.  These have taken place of company pensions.   Unfortunately they are often invested in the very volatile stock market so losses can be staggering and very difficult to make up.  A $200,000 retirement nest egg can be lost in a matter of a couple years!

Tax Free: Money that can be taken out of a plan/policy without having to pay taxes.  Legally avoiding taxes is the BEST way to build your retirement nest egg.

Tax Deferred:  Money that gets taxed when it is taken out of a plan/policy.  This is often done later in life when you may be in a lower tax bracket. Additionally, this money can grow at a faster rate due to the magic of compound interest.

Indexed Universal Life:  A permanent life insurance policy that allows policyholders to tie accumulation values to a stock market index and typically contains a minimum guaranteed fixed interest rate component along with the indexed account option. Money is taken out tax free later in life.  These policies also provide living benefits (see below).

Living Benefits: Payouts from an insurance policy prior to death.  The payouts can help in cases of chronic, critical and terminal illness.  This benefit can help offset the staggering costs of medical care at any age.  It can be used to pay for experimental treatments, in-home care, nursing home care, etc....   It is part of a life insurance plan you DO NOT have to die to use.  This can make a huge difference in your family's well-being and help you avoid possible health-related bankruptcy since health care issues are the number one reason for bankruptcies in the United States..

Term Insurance: A policy with a set duration limit on the coverage period. Once the policy expires, it is up to the policy owner to decide whether to renew the term life insurance policy or to let the coverage end.  The policy has no value once it expires.

E-mail us at contactus@unlimitedsuccessfinancial.com to find out how we can help you plan your financial future.