Biggest Investor Mistakes: iPonzi, Anyone?

By Ben Steverman - 2011-09-13T22:48:05Z

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Insurance Overload

Tax-deferred investing can be a great strategy, but like anything, it can go too far. One executive was investing all his retirement money in life insurance policies, because he liked the tax deferral. The premiums were so high they were derailing his retirement plans, though, as he found out when he met with financial planner Frank Boucher of Reston, Va. Boucher figured his client had $4 million more in insurance than he needed. If he'd died he would have unnecessarily triggered federal estate taxes. By cashing out most of the policies, Boucher redeployed the assets into mutual funds and saved $50,000 in annual premiums, enough to put his client's retirement back on track.

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