Tax Free Retirement

Is a tax free retirement possible? Well, maybe not entirely. However, you may be able to receive an income from certain life insurance IUL plans. In that case, the income isn’t subject to income tax. Other potential tax free* income strategies include taking out money from a Roth IRA or certain Roth 401(k) plans, too. Depending on your retirement plan, you may have additional tactics in terms of taxes. For example, a max cash value life insurance may create an option for income that is tax free.*

How Life Insurance May Provide Income

Grandfather Reading Book with Granddaughter Tax Free Retirement California

The basics of life insurance are fairly simple. Basically, life insurance protects your family once you are no longer here to provide for them. Of course, many people choose life insurance to have peace of mind. However, there is another consideration. A life insurance benefit might also be an income source in retirement. Although not for everyone, some retirees may benefit from this idea.

Some people choose an indexed universal life (IUL) policy as a savings plan. For example, IUL money is available for emergencies or can be liquid. You may also choose to use your money in an IUL for major purchases or even college costs for the grandchildren. Using this money instead of other savings accounts may allow you some flexibility with how you move your money around. Learning all your insurance options, you’ll have the knowledge you need to reach your retirement goals.

How To Have a Tax Free* Retirement

Not all retirees will use life insurance as a source of income, of course. Each situation is unique. However, sometimes an IUL may work well. You might be able to earn tax free* income a product like an IUL.

Some reasons you may consider this product for your retirement are:

  • There is a cap on how much you can put into your 401(k), etc.
  • You want to learn about how to defer taxes
  • “Just in case” money is important to you
  • Protection from the market
  • Family members may get the income after you pass away
  • The money is there when you need it
  • If the market drops, you know your money is ok
  • Your income needs align with “cost basis” of your life insurance cash value
Your Loved Ones

Leaving a legacy may be important to some retirees. In fact, life insurance may be able to help you do that. The laws and taxes will differ from stock market investments, for example. Beneficiaries can get their money without taxes. Also, you have been a good saver so you could protect your family. The right type of life insurance plan could help you make sure that happens.

Life Insurance Options

Marathon Group Financial cares about our clients. We want you to know information that can help you reach your goals. Retirement may be a time to re-examine your life insurance needs. Reach out today for a review of your current policies. We can discuss your current status and also look at other options. Your family and legacy deserve protection. Let us help you.

Smiling Senior Couple Running Tax Free Retirement San Diego CA

*Proceeds from an insurance policy are generally income-tax-free, and if properly structured, may also be free from estate tax. Income-tax-free distributions are achieved by withdrawing to the cost basis (premiums paid), then using policy loans. Loans and withdrawals may generate an income tax liability, reduce available cash value, and reduce the death benefit, or cause the policy to lapse. This assumes the policy qualifies as life insurance and is not a modified endowment contract. The Host and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. This content is not intended to serve as the basis for any investment or purchasing decisions, nor does it recommend or involve the purchase, holding, or sale of a security.  All figures herein are hypothetical and for illustrative purposes only to explain general concepts.  No figure is to be relied upon as being accurate nor a guarantee or projection and is meant only as a partial overview of some relevant features and benefits of general insurance products that may be in the marketplace, and whose availability will be dependent on the State of residence of the consumer, and their individual suitability for the product they are wanting to purchase. Where insurance products are mentioned, any and all guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

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