Why consider Tax-Free Life Insurance as Retirement Income?

As we get older, one of the biggest questions we ask ourselves is “Will I have enough money to live on when I retire?” One of the biggest factors in answering this question is generating retirement income that is tax-free. Where will this income come from? Will it come from an IRA? Will it come from my annuity? Will it come from a 401K? Or, can I look into Tax-Free Life Insurance and what can it do for me?

It could come from a life insurance policy.

Why might you ask, because life insurance can be a more efficient vehicle than IRA accounts or annuities because of how the distributions are structured. An example is withdrawing your basis first, which is tax-free. Then you can setup a structure for your withdrawals as policy loans (also tax-free) which get paid back from the tax-free death benefit when you eventually pass away. These policy loans are in addition to your death benefits which is part of your retirement income.

The amount of retirement income you can draw from your life insurance will vary depending on the type of policy in which you have and how it performs. Traditional policies offer annual payouts on dividends and interest rates.

You can structure your tax-free income from your life insurance policy based on the amount of money or payouts you think you will need when you retire. Elements to consider are how much you’ll want to withdraw and over how many years. Choosing a life insurance policy with payouts will allow you to have a retirement without fear of running out of money.

If you want to go through all the options of tax-free life insurance; we can help you find the one that will work for you and your expectations for your lifestyle. Call Advanced Insurance Concepts today and Jim Rooney will work with you to find the best insurance policy.