Life insurance retirement plans
Much like a Roth I.R.A. which has tax free advantages a Life Insurance Retirement plan will actually offer a greater tax free benefit. This retirement tool has been around for much longer than its more famous "tax free" counterpart the Roth I.R.A. Quite simply people forget the tax advantages of insurance in many cases. There are some distinct benefits similar to retirement accounts like a Roth IRA though. The biggest benefit here is that it has no income restrictions which are a stopped at 173,000 for Roth contributions. By utilizing a L.I.R.P. your contributions to the policy first cannot exceed a certain amount (I.R.S. M.E.C. limits) but most importantly can also grow tax free afterwards. When you either earn to much or lack the necessary income to utilize a Roth account the L.I.R.P. is probably the best answer as a portion of a balanced retirement portfolio. It also can avoid triggering a lowering of your Social Security benefits amount eligiblity. In order to properly utilize a L.I.R.P. there are few choices available to you in the insurance policy that must be set up. One is the choice of a accumulation strategy for the client, the most common is an indexed strategy which is funded with dollars whose growth is linked to the upward movement of the stock markets indexes and will typically return around 13% to 15% but could also be 0% with no losses in a down market. The second choice is the insurance company investment portfolio which typically tend to be a safe but have a modest rate of return around 3% to 5%. The third choice is passing your contributions through a Mutual fund portfolio which the insurance company will hold as a sub account but exposes you to all the stock markets volatility.
The next thing needed is for you to set up a term type policy within your policy that will have additional benefits in which the I.R.S. requires premiums to be paid into with limits (M.E.C.) and restrictions. You also must make sure your policy will not have to many expenses (Life Insurance policy, Long term care benefits) and still have robust growth that can be withdrawn as loans against the policy tax free, which lowers the policy death benefit potentially. For more information and to see if this the right solution to your retirement portfolio call or email us toll free at 877-775-0812 for a qualified professional to discuss your needs. You can also submit your questions below or schedule a free initial consultation with our contact tab.