The Stream Protection Plan: a Roth IRA on Steroids
The Stream Protection Plan and Roth IRA are tax-free retirement vehicles. But what makes Stream the muscle car and a Roth IRA the Mini? Jump in, and we’ll show you how to get ripped returns.
- Stream and Roth IRAs are tax-free retirement vehicles
- Tax hikes are imminent
- Stream uses bank funding to supercharge your life insurance plan
- Stream accumulates cash value and a death benefit
- Roth IRAs have capped contributions that limit growth
- Stream protects you from market volatility; Roth IRAs don’t
What is the Stream Protection Plan?
It’s an Indexed Universal Life insurance policy called an IUL. Your contributions are paid over a five year period, and a leveraged bank loan grows the policy with a 5:1 ratio ($5 to every $1) that accumulates cash value in addition to your death benefit. Flexibility, harnessing market highs, and the zero percent-floor safety net are some of its advantages.
What is a Roth IRA?
A Roth Individual Retirement Account (IRA) is a traditional retirement account where contributions are made with after-tax income to grow and enjoy tax-free upon retirement. Unlike Stream, a Roth IRA doesn’t have death or wealth-transfer benefits, only the account value, so when you draw from the Roth IRA during your retirement years, the value only equates to what’s left. It also comes with restrictions on earnings, contributions, and when the money is available to you to withdraw without penalty.
Tax-free retirement vehicles
The Stream Protection Plan and Roth IRA both offer tax-free earnings on retirement. You pay contributions from your bank account rather than your pre-taxed paycheck. This is particularly appealing in the USA’s unpredictable market where the likely solution to the Government's COVID-19 strategy of printing oodles of money and increasing the National Debt is to hike up our taxes. While we anticipate both political parties will slug us with this, we expect one side to do so more aggressively than the other. Who knows how high those taxes will rise once you retire? Why not get them out of the way now?
The impact of contribution limits
We don’t mean to body shame here but, Roth IRA, you’re looking a little dweeby. The Government imposes limits on Roth IRAs; at Stream, we don’t. Allow us to indulge in some low-key flex.
Want to inject more cash into your Roth IRA to help it grow for your golden years? Sorry, no can do. Roth IRA is capped at $7k per annum if you’re under 50 or $8k if you’re over 50. This model is designed for you to get by but not be too rich. Harsh but true.Stream Blog 8_Roth on Steroids
At Stream, we know that the more money you make, the more you need to put away to enjoy the quality of life you’re accustomed to once you reach retirement. And why shouldn’t you aim for that? Traditional vehicles aren't enough for you to achieve this, so we created the Stream Protection Plan. There is an income (or investable assets) threshold amount to qualify, but no contribution limits exist. Combine that with bank leverage, and you’ll have a free-flowing strategy designed to buff up your cash accumulation plan. Go on, get your gains out!
Eligibility PSA: size does matter
While there’s no minimum salary for Roth IRA suitability, you’re disqualified if you’re single and earn over $161K or married with a combined income of over $240k.
To give life insurance providers confidence in offering you coverage, the Stream Protection Plan includes specific conditions to enter that are particularly designed for HENRYs (high income earners, not rich yet):
- single and earn $200k annually; or
- married and earn $300k annually; or
- you have investable assets exceeding $1M; and
- you can contribute at least $5k annually for 5 years.
How much are you willing to risk?
A key difference between the Stream Protection Plan and a Roth IRA is Stream’s stress-tested safety net that protects your policy so you never lose what you put in. Unlike Roth IRAs, Stream’s zero percent-floor life insurance model ensures peace of mind in volatile times by not exposing you to market risk.
Stream is the HIIT of retirement options
What’s your fitness regime: high-intensity interval training to smash it out quickly and get on with your day, or slog it out in a marathon?
The Stream Protection Plan is designed so you can promptly pre-fund your retirement in five short years and then sit back and watch your cash accumulate while the Roth IRAs sign up for an exhausting, long-funded commitment.
Show me the money!
The similarity between Stream and Roth IRAs is there are no required minimum distributions (RMDs). No matter your age, taxes and penalties don’t apply when leaving the money in your account. However, you’ll be penalized if you want to access your Roth IRA dollars before you reach 59½ years old. Stream’s difference is that regardless of age, you can access the cash value tax-free for unexpected life events, such as serious illness or milestone moments worth celebrating.
The Stream Protection Plan strategy allows more Americans to pump up their retirement wealth. And why shouldn’t we plan to enjoy our later years? After all, everyone deserves a little treat after a workout.
