Comments on: Equity Harvesting: A Good Idea? http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 25 May 2012 02:50:51 +0000 hourly 1 http://wordpress.org/?v= By: Aaron http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-411895 Aaron Wed, 01 Apr 2009 01:03:51 +0000 http://allfinancialmatters.com/?p=2059#comment-411895 Admittedly a bit off topic, but if you wanted to decrease your monthly HELOC payment, this site has a great ebook that teaches some pretty creative ways of doing so. I've decreased mine by over $150. http://thepayground.com/heloc_home.html Aaron Admittedly a bit off topic, but if you wanted to decrease your monthly HELOC payment, this site has a great ebook that teaches some pretty creative ways of doing so. I’ve decreased mine by over $150.

http://thepayground.com/heloc_home.html

Aaron

]]> By: Roccy http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-364511 Roccy Sun, 28 Sep 2008 19:19:38 +0000 http://allfinancialmatters.com/?p=2059#comment-364511 If you'd like to read the industry standard book on this topic The Home Equity Management Guidebook, go to http://www.thewpi.org/?a=PG:913. The bottom line is that give certain real world assumptions Equity Harvesting works fine. The problem is that the concept is for the financially stable not for everyone who happens to have equity their home. In the book you can see with verifiable math the difference between growing wealth in cash value life, brokerage accounts, 401(k) plans and Roth IRA/401(k) plans. Roccy. If you’d like to read the industry standard book on this topic The Home Equity Management Guidebook, go to http://www.thewpi.org/?a=PG:913.

The bottom line is that give certain real world assumptions Equity Harvesting works fine. The problem is that the concept is for the financially stable not for everyone who happens to have equity their home.

In the book you can see with verifiable math the difference between growing wealth in cash value life, brokerage accounts, 401(k) plans and Roth IRA/401(k) plans.

Roccy.

]]> By: insurance » Equity Harvesting: A Good Idea? http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-149199 insurance » Equity Harvesting: A Good Idea? Mon, 08 Oct 2007 21:22:08 +0000 http://allfinancialmatters.com/?p=2059#comment-149199 [...] JLP wrote an interesting post today on Equity Harvesting: A Good Idea?Here’s a quick excerptThe author of the article defines equity harvesting as “…a means of removing equity from a personal residence through refinancing (or a home equity loan) where the money borrowed money is then placed in cash value life insurance. … [...] [...] JLP wrote an interesting post today on Equity Harvesting: A Good Idea?Here’s a quick excerptThe author of the article defines equity harvesting as “…a means of removing equity from a personal residence through refinancing (or a home equity loan) where the money borrowed money is then placed in cash value life insurance. … [...]

]]> By: Jim http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-148921 Jim Mon, 08 Oct 2007 02:02:04 +0000 http://allfinancialmatters.com/?p=2059#comment-148921 A Fixed annuity can be a very suitable position for retirement funds both during the accumulation phase and during the income phase of retirement planning. "Equity harvesting" can also be a very suitable strategy for building a tax-free retirement income stream. However the cash value life program must be structured properly (overfunded, minimum death benefit to maintain tax favorability, and disability riders). This plan is self completing (in the event of death -- death bene is paid tax free to beneficiaries, in the event of disability -- disability rider continues to make payments) no roth or traditional IRA or any taxable investment or savings vehicle provides this protection. A Fixed annuity can be a very suitable position for retirement funds both during the accumulation phase and during the income phase of retirement planning.

“Equity harvesting” can also be a very suitable strategy for building a tax-free retirement income stream. However the cash value life program must be structured properly (overfunded, minimum death benefit to maintain tax favorability, and disability riders). This plan is self completing (in the event of death — death bene is paid tax free to beneficiaries, in the event of disability — disability rider continues to make payments) no roth or traditional IRA or any taxable investment or savings vehicle provides this protection.

]]> By: » Weekly Roundup - Foundation Wall Edition @ fivecentnickel.com http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-148915 » Weekly Roundup - Foundation Wall Edition @ fivecentnickel.com Mon, 08 Oct 2007 01:54:25 +0000 http://allfinancialmatters.com/?p=2059#comment-148915 [...] JLP talked about equity harvesting. [...] [...] JLP talked about equity harvesting. [...]

]]> By: Moolanomy weekly roundup #11: “Investing” edition | Moolanomy http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-148828 Moolanomy weekly roundup #11: “Investing” edition | Moolanomy Sun, 07 Oct 2007 20:26:46 +0000 http://allfinancialmatters.com/?p=2059#comment-148828 [...] All Financial Matters presents Equity Harvesting: A Good Idea? Your primary residence is your home, don’t mess with it. [...] [...] All Financial Matters presents Equity Harvesting: A Good Idea? Your primary residence is your home, don’t mess with it. [...]

]]> By: www.bestretirementadvisor.info » Equity Harvesting: A Good Idea? http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-148786 www.bestretirementadvisor.info » Equity Harvesting: A Good Idea? Sun, 07 Oct 2007 16:47:02 +0000 http://allfinancialmatters.com/?p=2059#comment-148786 [...] JLP wrote a fantastic post today on “Equity Harvesting: A Good Idea?”Here’s ONLY a quick extractWhile $23000 is an ample amount of money tax free in retirement for a couple whose annual taxable income is $100000 a year the question becomes: What would Smith have done if he did not implement an Equity Harvesting plan? … [...] [...] JLP wrote a fantastic post today on “Equity Harvesting: A Good Idea?”Here’s ONLY a quick extractWhile $23000 is an ample amount of money tax free in retirement for a couple whose annual taxable income is $100000 a year the question becomes: What would Smith have done if he did not implement an Equity Harvesting plan? … [...]

]]> By: www.bestfinancialadvisor.info » Equity Harvesting: A Good Idea? http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-148424 www.bestfinancialadvisor.info » Equity Harvesting: A Good Idea? Sat, 06 Oct 2007 19:36:37 +0000 http://allfinancialmatters.com/?p=2059#comment-148424 [...] JLP wrote a fantastic post today on “Equity Harvesting: A Good Idea?”Here’s ONLY a quick extractLet’s also assume Mr. Smith will use a home equity line of credit (not a refinance) and will remove $76500 of equity from the home over a five-year period (which creates a 90 percent debt to value ratio on the property). … [...] [...] JLP wrote a fantastic post today on “Equity Harvesting: A Good Idea?”Here’s ONLY a quick extractLet’s also assume Mr. Smith will use a home equity line of credit (not a refinance) and will remove $76500 of equity from the home over a five-year period (which creates a 90 percent debt to value ratio on the property). … [...]

]]> By: Michael http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-148402 Michael Sat, 06 Oct 2007 18:14:19 +0000 http://allfinancialmatters.com/?p=2059#comment-148402 Equity harvesting in the specific way it was presented using life insurance might not be a good idea. But for the right individual who can invest for the long run and achieve returns in the 8-9% while borrowing at rates in the 6-7% range should come out ahead. It is a strategy for those with a decent appetite for risk, but certainly not a strategy without merit. And annuities certainly serve a purpose. They aren't for everyone, but the newest crop of Variable Annuities with "living benefit" riders have a lot to offer. Guaranteed payments for life with market participation on the upside? Of course, there is the downside. They are the most expensive products in the market. That is a big downside, and there is no hiding it. But for those who find themselves with no pension, and a 401K or IRA that they are going to try to live off of for the rest of their lives, a guaranteed income stream for a portion of their holdings makes sense. As a financial advisor at a big investment house, I expect this to be read by the public at large with a healthy dose of skepticism, and I can fully appreciate that. It is, afterall, healthy. Equity harvesting in the specific way it was presented using life insurance might not be a good idea. But for the right individual who can invest for the long run and achieve returns in the 8-9% while borrowing at rates in the 6-7% range should come out ahead. It is a strategy for those with a decent appetite for risk, but certainly not a strategy without merit.

And annuities certainly serve a purpose. They aren’t for everyone, but the newest crop of Variable Annuities with “living benefit” riders have a lot to offer. Guaranteed payments for life with market participation on the upside? Of course, there is the downside. They are the most expensive products in the market. That is a big downside, and there is no hiding it. But for those who find themselves with no pension, and a 401K or IRA that they are going to try to live off of for the rest of their lives, a guaranteed income stream for a portion of their holdings makes sense.

As a financial advisor at a big investment house, I expect this to be read by the public at large with a healthy dose of skepticism, and I can fully appreciate that. It is, afterall, healthy.

]]> By: Roundup for the Week Ending October 6 on Consumerism Commentary: A Personal Finance Blog http://allfinancialmatters.com/2007/10/04/equity-harvesting-a-good-idea/comment-page-1/#comment-148291 Roundup for the Week Ending October 6 on Consumerism Commentary: A Personal Finance Blog Sat, 06 Oct 2007 13:42:06 +0000 http://allfinancialmatters.com/?p=2059#comment-148291 [...] Equity Harvesting: A Good Idea? AllFinancialMatters explains equity harvesting first, gives an example, and concludes it’s not such a good deal after all. [...] [...] Equity Harvesting: A Good Idea? AllFinancialMatters explains equity harvesting first, gives an example, and concludes it’s not such a good deal after all. [...]

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