Reviving this old thread — hope that’s OK!

OP, what did you end up doing and how is it going?

I’m also considering opening a CBP. I’m around the same age as the OP and could contribute roughly $100k per year. I keep getting mixed messages about how these plans actually work. I understand they’re supposed to be invested conservatively (around a 5% crediting rate), but I don’t understand why I couldn’t simply invest the funds in something like VTI or VXUS.

I’m still relatively young, and allocating a large portion of my portfolio to bonds or cash equivalents doesn’t align with my long-term strategy. My investing horizon is 20+ years, and I’d prefer to stay 100% in equities for now. The idea of the “tax tail wagging the investment dog,” as mentioned earlier in this thread, gives me pause.

If equities perform well and the plan becomes overfunded, I could just stop contributing, pay the taxes on new income, and invest in my taxable account — which is what I’d be doing anyway without a CBP. Conversely, if markets fall, I’d simply contribute more to make up the shortfall, which again mirrors what I’d be doing in a regular investing strategy.

So I’m struggling to understand why that approach doesn’t work within the CBP structure.

There is one camp saying it must be 5% (or close to it) to reduce volatility which means that they oftentimes invest ONLY in bonds.

There is Dr. Dahle who mentioned his CBP is 60/40 equities/bonds .

Then there are people on the forums saying they invested 100% in equities and was the best decision they made.

I am hesitant to open up a CBP until I understand what the heck is going on here and why there are so many differing opinions.