Not sure which funds to invest in for retirement? We hear you.

You’ve probably heard a lot about S&P 500 index funds. It’s a bit of an investing buzzword. But what are S&P 500 index funds and are they a good place to invest your money?

Basically, the Indexed Universal Life Fund (IUL) is what’s called a stock market index. An index is simply a measuring stick—a way to track the progress of the stock market. The S&P 500 index measures the performance of the top 500 American companies on the stock market.

Still with us? Great! There are a few more key things to understand about the S&P 500 index, including index funds. Let’s break it all down.

S&P 500 Index Companies

You’ll certainly recognize some of the big names that help make up the S&P 500 index fund—we’re talking Apple, Alphabet/Google (it has two types of shares in the index), Amazon, Berkshire Hathaway, Facebook, JPMorgan Chase & Co, Microsoft, NVIDIA Corp, and Tesla. And the performance of these 10 largest companies in the index accounts for more than a quarter of the trading activity and overall return. See companies HERE

What Is an S&P 500 Index Fund (IUL)?

It's an insurance policy that typically pays interest based on the movement of underlying stock and bond indexes. It also works like a TAX-FREE RETIREMENT ACCOUNT.

How Does an S&P 500 Index Fund Work?

It’s pretty simple: If you invest in an S&P 500 index fund, you’ll own shares of all 500 stocks that make up the index. Those companies can—and do—change if the S&P 500 adds or drops some companies for others in the actual index.

You can invest in an S&P index fund through several different investment firms. The only real difference between them is the expense ratios (aka fees). Higher fees mean less of a return for you.

It’s also worth noting that an S&P 500 index fund is fairly diversified. Its investments are spread out among 11 major industries, and no sector has more than 30% of the money invested. Here’s a look at the different business sectors that make up the index - CLICK HERE

Should I Invest in an Index Fund (IUL)?

How much money would you have saved by now? How much sooner could you retire? IUL has been around for almost 30 years. Now, we have over 40 companies that offer IUL. Policies continue to evolve and get better each year. IUL policies do not lose money, which is rule number 1.

You May ask... What is the difference between an IUL and a 401(k) or IRA?

With a Tax-Deferred 401(k) or IRA....

✘ You must pay taxes. Either in advance or when you're taking income in the future

✘ Your money is not liquid. You can't access your money any time you want, and if you do a hardship withdrawal, you're heavily penalized.

✘ ​You are limited to how much you invest. Plans with most tax benefits have annual funding limits.

✘ Your money is not guaranteed. The money in your 401(k) or IRA may increase in up markets but accordingly will decline in falling markets.

✘ You are required to report your earnings to the IRS. Everything in a 401(k) or IRA is uncle sam’s business.

Discover the Wealth Secrets of the IUL

✔ You don’t pay taxes on growth or principal. Ever! This is 100% legal if your account is set up correctly, and structured according to current IRS tax-code.

✔ Average historical returns of 7-10% annually. Completely tax-free.

✔ Your Account is GUARANTEED not to go backwards. Lock in gains when the market is up, but suffer NO loss when the market is down.

✔ ​You are not required to report money you take out to the IRS. The IRS doesn’t consider money taken out as ‘income’ – so there’s no tax. It's none of their business!

And there are many more wonderful fiscal things you can do with an account like this...

Get With Carlos Roman Financial Coach

You should never invest in anything you don’t understand. A Financial research study found that 40% of Americans don’t have anyone they trust for retirement advice. If you’re one of those people, let’s change that!

It’s always a good idea to sit down with someone, like a Carlos Roman Financial Coach, who can help you set goals for your financial future and help you understand what is best for your finances. And when the market dips—and it always does—they can be your voice of reason and keep you on track.