Author Topic: Retirement: 401K vs 7702  (Read 2160 times)


  • 5 O'Clock Shadow
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Retirement: 401K vs 7702
« on: June 13, 2016, 11:19:14 AM »
Most of the financial advise I have seen / followed has come from the posts on MMM. My general rule of thought has been to Max out employer match with self picked 401K allocations, Max my IRA / HSA, then Max the rest of my 401K.  This is all based on that thought, that i wont need to touch any of this money for at least 30 years. A friend of mine recently informed me that 401Ks should not be used and instead I should be using a 7702. He said during a down market you get a guaranteed .75% return, and during an up market, you cap at 15%. Is this true? Can someone help me understand the difference between a 401K and the 7702, as well as the MMM communities general opinion of the use case for 7702 in regards to retirement.  Thanks!


  • Pencil Stache
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  • Location: Houston, TX
Re: Retirement: 401K vs 7702
« Reply #1 on: June 13, 2016, 11:22:24 AM »
A "7702 plan" is life insurance, not a tax advantaged investment plan.


  • Walrus Stache
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Re: Retirement: 401K vs 7702
« Reply #2 on: June 13, 2016, 11:25:58 AM »
So is your friend an insurance salesman, or has s/he recently bought one of these?

Don't mix your insurance and your investing.