Jeffrey Allen Bogart

Hi Danny,

All of us agree you have an equity index life insurance product not an annuity. When purcahsing insurance the first question is do you need the death benifit protection that is provided by a life insurance policy? If yes it may be a good product for you. If no you may have to reassess. Like David said there may be some extra added tax benefits if your policy was designed to fall within certain codes. Have a conversation with your agent and get the real poop on the policy.

Another strategy would be to stay with your current 30 year loan and invest the difference between the two payments in a mixture of stocks, bonds, CD's etc. If the difference was $500 per month and you invested that amount for 15 years at a 6% return the money would be worth $145,000. Now amortize your current 30 year loan and see what you will owe the mortgage company 15 years from now. If that amount, in our example were, $100,000 you have the option of paying it off with your savings and have some money left over. You would also receive more tax deductions for the 30 year loan too, if the amount owed, on your current mortgage, after 15 years is $250,000 it may be better to taking the 15 year loan. Of course this strategy calls for a person to be very disciplined, if you don't feel you can consistently save the money it may not be for you.

Good question Vivian and the answer has a lot of depends to it! LOL. It depends on your age, it depends on your goals, it depends what you consider to be a risky investment. For broad based asset classes, historically, small cap value has been the best returning and riskiest asset class. Just as in life, there is no free lunch in the world of investments. If you were to invest in an actively managed small cap value fund it may be wise to do so in a tax sheltered account. Conversely if you were to invest in a tax efficient small cap value index or Exchange Traded Fund a taxable account may be better.

Let's change the conversation a little Vivian, if it's pure tax efficiency is you goal, it may be best to keep you fixed income funds in your tax sheltered account. Interest from bonds is taxed as income which is usually higher than capital gains. Of course if you followed that strategy your taxable accounts would become riskier for lack of fixed income. A solution would be to have your taxable fixed income in municipal bonds.