Good year of crediting for EIULs January 17, 2014Posted by shaferfinancial in Finance, mutual funds.
Tags: EIUL, Interest Credit in EIULs
Just a short update on 2013’s crediting on the Minnesota Life’s EIULs.
If you were in the S&P 500 index you got the full cap of 13% credit.
If you had switched to the blended index as I suggested you would have got the full cap of 16% [this is all dependent upon what month your anniversary is as the index credit has some variance from month to month. These credits assume a December anniversary date]
The variable rate loan charge is 4.5% currently, so if you were taking out a variable loan last year you would have made 11.5% on the money you had loaned out.
Obviously, if you had money in an index mutual fund you would have bigger gains this year, but as I have demonstrated many times before, the lack of losses in the account more than makes up for the occasional underperformance vis a vis the index with downside market risk.
The last year demonstrates the strategy working just as it should.
It was pointed out to me that I haven’t written a full post on using EIULs for retirement income in a long while, so I will write one this month for those new to my blog.