Here is one example of how one can leverage insurance to aid in retirement planning this is especially helpful if you plan on retiring before 59.5 where you would suffer penalties taking money out of your 401k.
If you were to invest in either a variable or universal policy and you put extra money into and let it grow to the max with out losing its insurance status you can then take withdrawals out tax free.
When I say lose its insurance status I mean exactly that if you over-fund a policy beyond a certain point , which with todays software can be easily illustrated for various scenarios the money in the policy may be taxable as a gain. So before you go funding your life insurance policies like crazy, have your financial representative make an illustration of for example of what would happpen if you put 300 dollars away in a variable policy at age 24 till age 55 and then took out withdrawals for 5 years. You will be pleased to see how much your money has grown but also how much you can take out tax free.
When using this method you need to make sure that you don't let your policy lapse you see as long as any death benefit is paid the money you invested and took out will be tax free.
Note that when using this method that some money is lost to offset sales charges and fees, if you were to invest in the same investments that are within a variable life insurance policy outside the insurance policy if you put them side by side the investments outside the insurance policy would be more however depending on you tax situation the insurance policy may be a good fit. After all its not how much that is in your account that is most important but its important to know how much you keep.
This is just one of the many reasons why Life Insurance may be a good option for you. If you need further assistance or would like to see an illustration of how this works shoot an email over to medinifinancial@gmail.com
No comments:
Post a Comment