Why? If you don't care about your heirs, you will die with tens of millions of dollars unspent in the bank.The money is for me, my wife and are kids while we are alive. While I am not selling assets in this plan, I am still drawing the loan against my portfolio to fund my retirement.The estate tax lifetime exclusion for a married couple in 2026 will be less than $14M. If you are starting retirement now with $10M that you are not drawing down, your estate will owe a lot of taxes if you live for 30 years.There are easier ways to guard against estate taxes and a much higher threshold on when they kick in though. At worst it’s a bad deal for my heirs, not me.
As far as whether it's a bad deal for your heirs, if you aren't drawing down your portfolio, who is the money for?
Does your entire strategy rely on the presumption that market returns will exceed the interest rate you borrow at?
I don't even need to build a model to know that if you borrow >4% year continuously, in 10-15 years if the market drops 50%, and there's a margin call, you will be wiped out, while the conventional method will still have 25%-50% of their original portfolio. There is huge asymmetrical risk in your plan.
Statistics: Posted by toddthebod — Mon Apr 01, 2024 12:55 pm — Replies 72 — Views 5272