Just hearing about this.. looking into this.. At first glance it is very similiar to workplace savings like 401k/403b. Many times these let you borrow your own money and pay it back and including interest payments through your paychecks. I have borrowed like this atleast 4 times. Problem is max borrowing is limited at $50,000.00 per withdrawal. I am not willing to risk a ponzischeme or scam.. Therefore... I am pretty sure I won't opt for this.
Hope this can help someone out there!! :-)
Given the nature of the ads, someone is using this to get your money. Nobody seems to know what it is for sure. The ads are extrermely vague and inflammatory. Someone said it sounds too good to be true, so it probably is. Either it's a total scam, or it's something so esoteric and limited in application that 99.9% of us either couldn't or wouldn't want to use it anyway. I would certainly stay away from any of the companies and individuals posting the "sky is falling" and "you must act now" types of ads--those are almost always scammers. But both greedy individuals and naive individuals have been falling for these sorts of scams as long as there have been people and money.
I think the program everyone is alluding to is known as the 26f program. There is a sales pitch going around the internet that on April 10, 2017, the DOL is going to close some sort of 'loophole' to these programs that could cost people (investors?) upwards of $70,000/year. They want you to invest your money with them before that date so you don't fall victim to the nefarious actions of the government.
The problem with this is that they don't exactly tell you in what you are investing. They refer to them only as 26f programs--programs that everyone from President Reagan to Warren Buffet to President Trump, and all the 'Little Joes' of America have squirreled away money into and have, over time, become millionaires (or in the case of the first three names, billionaires).
I know nothing about these programs beyond my commentary above, but I think it would be worth USAA's time to have someone research these programs (or this program) and put some information about it out to members. The ads seem to target retirement-age investors, a vulnerable group already, with a mixture of 'doom-and-gloom, but don't worry because we're here to save the day' lingo.
Is this a possibility?
MadMav - Thank you for sharing the additional information. I have forwarded your concerns to the correct area for further review. A subject matter expert will contact you to further discuss your concerns. Thank you for the opportunity to look into this for you. - Tricia
I've never ended up on one of these threads before today, but pretty disappointed to see the lack of information posted by USAA in response to the questions posed here. If you're going to monitor a thread...you should provide solid responses, particularly since the articles that are driving people to be interested in this topic are basically advertisers using scare-tactics.
I was at a conference with physicians and an insurance sales guy had a booth. He said a self-funded policy could be used to borrow against and especially in retirement, one could "borrow" against it, tax free, to provide retirement income and the policy would payout when one dies. Sounded like a pretty good deal. I asked him the downside and he was candid that the fees for setting it up had to be considered a drawback unless one could fund a pretty substantial (>$1M). I think it was probably a 26(f).
(in response to the post about a conference)
He was likely selling LIRPs (Life Insurance Retirement Plans). That would especially make sense considering the audience....which is a great product for the right clientele. From what I can see, this 26(f) is likely very similar. I would also venture a guess that whatever the actual product is, there is fear it is something no longer allowed after the DOL blackout (which is in no way a blackout). I'm betting this group wants to grab sales before DOL legislation goes into effect, essentially "grandfathering" them in (when their income source becomes eliminated).