Mpi Investment: What You Should Know

When I first learned about MPI investment strategies, I was skeptical. Like most people, I’d been conditioned to think about retirement in terms of traditional 401(k)s and IRAs. But after watching my parents lose their retirement savings in 2008—despite doing everything “right” with real estate and stock market investments—I knew there had to be a better approach.

That’s when I discovered the MPI strategy, which isn’t actually an investment at all. It’s a comprehensive approach to retirement planning that uses properly designed life insurance to create tax-advantaged retirement income. Let me share what I’ve learned about how this strategy works and why it might be worth considering for your retirement planning.

For a complete overview, see our comprehensive MPI guide.

What Is MPI Investment?

First, let’s clear up a common misconception: MPI isn’t technically an “investment” in the traditional sense. MPI stands for Maximum Premium Indexing, and it’s a strategy that uses a properly designed, max-funded Indexed Universal Life (IUL) policy to help create retirement income.

The strategy was developed by Curtis Ray and brought to market in 2018 after four years of development and compliance approval. It combines several existing features of life insurance contracts in a strategic way to potentially provide:

• Principal protection through a 0% floor
• Tax-advantaged growth potential
• Tax-free retirement income through policy loans
• No contribution limits like 401(k)s or IRAs
• Access to funds at any age without penalties

How MPI Differs from Traditional Retirement Strategies

Most retirement strategies focus on building account balances. The MPI strategy focuses on creating spendable retirement income. There’s a big difference between the two.

Let me give you an example I use with my clients. Let’s say you have $1 million in your 401(k). Using the 4% rule—which is what most financial advisors recommend for safe withdrawals—that gives you $40,000 a year. After taxes, you’re looking at maybe $36,000 take-home. That’s $3,000 a month.

Now compare that to $1 million in a properly designed IUL using the MPI strategy. At a 10% distribution rate—which may be realistic with this approach—that’s $100,000 a year, and it can potentially be tax-free through policy loans. That’s the difference we’re talking about.

The Core Components of MPI

The 0% Floor Protection

One of the most powerful features of the MPI strategy is principal protection. Your money is never actually in the stock market. Instead, it’s held in the insurance company’s General Fund, which invests in ultra-conservative assets like AAA bonds and mortgage notes.

The insurance company uses the returns from these conservative investments to purchase S&P 500 index call options. When the market goes up, you participate in the gains (up to a cap). When the market goes down, those options expire worthless, but your principal remains protected.

Think of it this way: when the market crashes and those options expire worthless, you only lost the gravy, not the steak. Your principal—the steak—never went anywhere. It was sitting safe in the General Fund the whole time.

Index-Linked Growth Potential

While your principal is protected, you still have the opportunity for growth. The MPI strategy typically provides index-linked crediting based on the performance of the S&P 500, historically averaging around 7-8% returns in properly designed IUL policies.

This gives you potential upside participation without direct market exposure. You’re not investing in the stock market—you’re using the market’s performance as a way to calculate interest credits to your policy.

The Participating Loan Feature

This is where the MPI strategy gets really interesting. Traditional retirement accounts force you to choose between growth and access to your money. With the participating loan feature, you can have both.

When you take a loan against your cash value, your money stays in the policy and continues earning index credits. You’re essentially borrowing against your own money while it keeps growing. If the index credits exceed the loan interest rate, you have a positive spread.

Think of your cash value like a bucket. When you take a policy loan, you’re not taking water out of the bucket—you’re just putting a lien against it. The bucket stays full, and that full amount keeps earning index credits.

The MPI Process: Five Key Steps

Step 1: Save (Pay Yourself First)

The foundation of any wealth-building strategy is committed savings. The MPI strategy typically works best for people who can commit to substantial premium payments over time. My rule of thumb is your age times 10—so a 40-year-old should be able to contribute at least $400 per month.

Step 2: Protect (Build the Foundation)

The properly designed IUL provides guaranteed protection against stock market losses. Before you can “go up,” you need to “build out.” Security is the foundation—like building a skyscraper, you need packed soil, concrete, and rebar before adding floors.

Step 3: Grow (Index-Linked Crediting)

Your money grows through index-linked crediting with a 0% floor, helping create steady, predictable long-term compounding. The key is consistency over time—letting compound cycles work their magic.

Step 4: Leverage (Strategic Use of Policy Loans)

This is where the strategy becomes powerful. By using the participating loan feature strategically, you can potentially achieve additional compound cycles in the same time frame. You’re leveraging the insurance company’s money while your money continues growing.

Step 5: Time (Discipline and Patience)

The MPI strategy requires discipline and time. This isn’t a get-rich-quick scheme. It’s a 20-40 year strategy designed for people who want predictable, tax-advantaged retirement income.

MPI vs. Traditional 401(k): The Real Comparison

Here’s how the MPI strategy potentially compares to traditional retirement accounts:

401(k) Approach:

• Limited to $23,000 annual contributions (2024 limits)
• Full market exposure and risk
• Taxable withdrawals in retirement
• 10% penalty for early access before 59½
• Required minimum distributions at age 73
• Safe withdrawal rate around 4%

MPI Strategy:

• No government-imposed contribution limits
• Principal protection with 0% floor
• Tax-free access through policy loans when properly structured
• No age restrictions for accessing cash value
• No required distributions
• Potential withdrawal rates up to 10%

The difference in retirement lifestyle can be substantial.

What You Need to Know About the Commitment

I believe in being completely transparent about what the MPI strategy requires:

It’s a Long-Term Strategy

This isn’t something you do for 5 years. Surrender charges typically exist for 10-15 years, though you access money through loans, not surrender. This is designed for people planning 20-40 years ahead.

It Requires Substantial Premiums

To make the math work, you need to be able to commit to significant premium payments. This strategy works best for people who have been maxing out their 401(k) and looking for additional retirement savings options.

It Goes Against Conventional Wisdom

Wall Street doesn’t typically promote insurance-based retirement strategies because they can’t manage the assets. You’ll likely encounter skepticism from traditional financial advisors.

It Requires Understanding

You need to understand how this works to stick with it. Like any strategy that goes against conventional wisdom, you need conviction in the approach.

Is the MPI Strategy Right for You?

The MPI strategy can be powerful for the right person, but it’s not for everyone. It typically works best for people who:

• Have maximized other retirement accounts
• Can commit to substantial premium payments long-term
• Want principal protection with growth potential
• Are looking for tax-advantaged retirement income
• Understand this is a marathon, not a sprint

My sweet spot client is usually around 40 years old, has been contributing to a 401(k) for years, and is starting to realize that traditional retirement savings alone might not provide the retirement lifestyle they want.

Common Questions and Concerns

“This Sounds Too Good to Be True”

I understand the skepticism. But here’s the thing—every single component of the MPI strategy already exists inside standard life insurance contracts. The 0% floor, the participating loan feature, the tax treatment—these aren’t new. What’s different is how they’re strategically combined.

“What About the Fees?”

A properly designed, max-funded IUL can have competitive long-term costs when you factor in the tax advantages. By using minimum death benefit and maximum premium, insurance costs are minimized. The tax savings often exceed any internal policy costs.

“Can’t I Do Better in the Stock Market?”

Possibly in gross returns during bull markets. But after accounting for market losses in down years, taxes on gains, sequence of returns risk in retirement, and the 4% safe withdrawal limitation, the MPI strategy often produces more net spendable retirement income on the same dollars saved.

The Bottom Line

The MPI strategy represents a different approach to retirement planning—one that prioritizes income over account balance, tax efficiency over gross returns, and principal protection over maximum growth.

It’s not for everyone, and it’s certainly not a shortcut. But for people who understand the math and can commit to the long-term approach, it can potentially provide a more predictable path to financial freedom in retirement.

The key is working with someone who truly understands how to design and implement the strategy properly. Like any powerful tool, it needs to be used correctly to achieve the intended results.

Every family’s financial situation is unique, which is why I don’t believe in one-size-fits-all solutions. The MPI strategy might be a great fit for your retirement planning, or traditional approaches might make more sense based on your specific circumstances.

Related Reading

• Indexed Universal Life Insurance Pros and Cons
• Policy Loan Life Insurance: What You Should Know
• Benefits of IUL: What You Should Know
• Retirement Income Solutions: What You Should Know

Ready to explore whether the MPI strategy could work for your situation? Request a free consultation and let’s discuss your retirement planning goals. I’ll help you understand all your options and determine the best approach for your family’s financial future.